AL SALAM E-COMMERCE LTD

Executive Summary

AL SALAM E-COMMERCE LTD is a newly incorporated micro-entity with minimal financial resources and low turnover, showing marginal profitability and a fragile liquidity position. The company's current asset base has diminished to zero, raising significant concerns over its ability to meet debt obligations or sustain operations without external support. Given these factors and the lack of commercial management experience, the credit risk is high, and approval for credit facilities is not recommended at this stage.

AL SALAM E-COMMERCE LTD - Analysis Report

Company Number: 14632883

Analysis Date: 2025-07-20 15:29 UTC

1. Credit Opinion: DECLINE

Given the company's micro size, very limited turnover (£3,770 for the latest period), and minimal net assets (£800), AL SALAM E-COMMERCE LTD demonstrates extremely limited financial capacity to service debt. The business is in its infancy (incorporated 2023) and shows very low revenue generation with a marginal profit of £200 in the most recent year after a prior loss. Current assets have declined to zero, indicating no liquid resources on hand at the latest reporting date. The sole director is a student with no apparent commercial management experience, raising concerns on financial stewardship. The company operates in a highly competitive retail sector without tangible working capital or proven cash flow strength. No filings are overdue, but the minimal scale and asset base suggest significant credit risk.

2. Financial Strength:

The balance sheet shows fixed assets of £800 and net assets of £800 at 28 Feb 2025, down from £1,046 the previous year. Current assets have dropped from £246 to zero, and current liabilities remain nil, resulting in net current assets moving from £246 to zero. The capital base is very thin, and the company lacks liquidity buffers. The modest retained earnings and equity reflect limited accumulated profitability and no reserves to absorb shocks. The absence of borrowings or creditors is positive but also indicates a lack of external financing or trade credit. Overall, the financial structure is fragile and insufficient to support meaningful credit exposure.

3. Cash Flow Assessment:

Cash flow appears constrained given zero current assets at year-end and minimal turnover. The company’s cost of materials closely matches turnover, leaving negligible gross margin and just £200 profit, which includes a tax charge. The absence of staff costs and depreciation is consistent with a very small operation. The working capital position is weak with no cash or receivables, indicating limited ability to cover operating expenses or service new debt. This raises concerns about the company's ability to sustain operations without additional capital injection or improvement in cash inflows.

4. Monitoring Points:

• Revenue growth and margin improvement from very low base
• Liquidity position, particularly current assets and cash balances
• Profitability trends and ability to generate positive retained earnings
• Any changes in director or management that might enhance financial oversight
• Timeliness and completeness of future filings to ensure transparency
• Capital injections or external funding that improve financial resilience