Company Number: 13271076

Analysis Date: 2025-07-20 12:40 UTC

1. Credit Opinion: APPROVE

AIRFLO VENTILATION LTD demonstrates a stable and improving financial position with positive net current assets and net assets increasing year-on-year. The company is active, with timely filing of accounts and confirmation statements, indicating good compliance and management discipline. Although the company is relatively small and recently incorporated (2021), the steady growth in working capital and equity supports its ability to service debt obligations. The presence of a director's loan account as part of current liabilities suggests some reliance on internal financing, which is common in SME operations but should be monitored.

2. Financial Strength:

• Net current assets increased from £30,072 in 2023 to £36,557 in 2024.
• Net assets rose from £30,072 to £36,557 over the same period, reflecting retained earnings growth.
• Current assets grew to £106,780, driven primarily by an increase in trade debtors (£63,048 in 2024 vs. £32,574 in 2023) and amounts owed by group undertakings (£26,515 in 2024, none in 2023).
• Current liabilities also increased slightly to £70,223 (from £64,951), notably due to a higher director's loan account balance (£33,099 in 2024 vs. £15,819 in 2023).
• Share capital remains nominal at £10, typical for private limited companies, with equity mainly built through accumulated profits.

Overall, the balance sheet shows a sound equity base and positive working capital, indicating financial resilience.

3. Cash Flow Assessment:

• Cash at bank decreased significantly from £34,686 in 2023 to £4,883 in 2024, which may indicate tighter liquidity despite overall net current assets being positive.
• The increase in trade debtors suggests extended credit terms or slower collections, which may put pressure on cash flow.
• The director’s loan account balance has doubled, suggesting reliance on short-term internal funding to support operations or working capital needs.
• The company has no significant trade creditors, which reduces immediate payment pressure.
• Positive net current assets and a healthy debtor book support operational liquidity, but the low cash balance warrants closer monitoring.

4. Monitoring Points:

• Monitor cash flow closely, particularly the conversion of trade debtors into cash, to avoid liquidity stress.
• Review the director’s loan account regularly to ensure it does not become a source of financial strain.
• Watch for any increases in current liabilities beyond normal operational levels.
• Track debtor aging reports to assess collection efficiency and credit risk.
• Observe profit generation trends in future accounts to confirm sustained growth and equity build-up.
• Keep an eye on any changes in ownership or director appointments that might affect governance or credit risk.