ALEXANDER MATTHEWS STAYS LTD

Executive Summary

Alexander Matthews Stays Ltd is a newly formed private company with significant negative equity and poor liquidity due to high debt levels, primarily from directors’ loans and bank borrowing. The company’s financial position and early stage of development present a high credit risk, with insufficient cash flow to service current liabilities. Credit facilities are not recommended at this time without clear improvement in working capital and operational cash generation.

ALEXANDER MATTHEWS STAYS LTD - Analysis Report

Company Number: 14925019

Analysis Date: 2025-07-20 11:16 UTC

1. Credit Opinion: DECLINE
   Alexander Matthews Stays Ltd shows significant financial weakness, with negative net assets of £88,764 and a large net current liability position of £366,771. The company is newly incorporated (2023) and has yet to generate positive retained earnings. The current liabilities, heavily driven by directors’ loan accounts (£357,527) and bank loans (£303,195), substantially exceed current assets, indicating poor liquidity. This financial structure raises concerns about the company’s ability to meet short-term obligations without additional capital injections. Given the negative equity and working capital deficit, they pose a high credit risk at this stage. Without evidence of operational cash flow generation or strengthened equity, credit facilities should be declined.

2. Financial Strength:
   The company’s balance sheet is dominated by a fixed asset investment property valued at £581,202, which is a positive long-term asset. However, the heavy reliance on debt financing (both short-term directors’ loans and long-term bank loans totaling nearly £685,000) results in negative shareholders’ funds and net liabilities of £88,764. The absence of employees and operational activity (no turnover or profit data disclosed) suggests the company is in a very early or developmental phase. The financial leverage is high and the negative net current assets highlight poor liquidity management and financial resilience.

3. Cash Flow Assessment:
   Cash on hand (£10,564) and debtors (£6,820 VAT receivable) are minimal compared to creditors due within one year (£384,155). The large directors’ loan account indicates reliance on related party financing to cover operational or financing gaps, which is not sustainable for third-party creditors. The negative working capital of £366,771 signals imminent liquidity stress, and no profit and loss details are provided to assess operational cash flow. The company’s ability to service bank loans and other liabilities from internal cash flow is unproven. The current liquidity position is weak and requires close monitoring if credit is extended.

4. Monitoring Points:

• Improvement in net current assets and positive working capital generation
• Reduction in reliance on directors’ loans and external bank borrowings
• Evidence of operational revenue growth and profitability in forthcoming periods
• Timely filing of accounts and confirmation statements to maintain regulatory compliance
• Stability and continuity of key management, especially monitoring director changes
• Asset valuation updates for investment property to ensure collateral value remains intact