DIVISION RECRUITMENT LIMITED

Executive Summary

Division Recruitment Limited has experienced a severe decline in financial health with negative working capital and near-zero net assets, indicating high risk in extending credit. The company’s micro-entity size and minimal equity reinforce its fragile financial position. Close monitoring of liquidity and management actions is essential before reconsidering credit facilities.

DIVISION RECRUITMENT LIMITED - Analysis Report

Company Number: 12783481

Analysis Date: 2025-07-20 16:25 UTC

1. Credit Opinion: DECLINE
   Division Recruitment Limited shows a significant deterioration in financial position over the latest year. The net current assets have swung from a strong positive £7,465 in FY22 to a negative £478 in FY23, indicating liquidity stress. Net assets plummeted from £8,262 to only £19, suggesting near insolvency on a balance sheet basis. This sharp decline raises concerns about the company’s ability to service debt or meet short-term liabilities without additional capital injection. The micro-entity status and minimal share capital (£1) also limit financial flexibility. Given the adverse trend and weak equity base, extending credit would carry high risk.

2. Financial Strength:
   The company’s fixed assets are minimal (£1,199), with current assets of £6,441 offset by current liabilities of £6,919. The negative net current assets imply working capital deficiency. Total net assets of only £19 indicate negligible buffer against losses or unforeseen expenses. The balance sheet shows a sharp erosion of shareholder funds from £8,262 in FY22 to £19 in FY23, signaling severe financial strain. The company remains active but is financially fragile, with limited asset coverage and equity.

3. Cash Flow Assessment:
   Current liabilities exceeding current assets suggest potential cash flow difficulties. The negative working capital means the company may struggle to cover short-term obligations as they fall due. The absence of profit and loss details limits full cash flow analysis, but the balance sheet trend indicates cash generation and liquidity have weakened significantly. Without evidence of improved cash inflows or external funding, liquidity risk is elevated.

4. Monitoring Points:

• Track ongoing liquidity metrics: current ratio and net current assets in future filings.
• Monitor any capital injections or changes in share capital to strengthen equity.
• Observe director actions for restructuring or refinancing plans.
• Watch for timely filing of accounts and confirmation statements as a proxy for management diligence.
• Keep alert for any late payments or defaults reported in payment behavior.