ALL THINGS FOOD AND DRINK LTD

Executive Summary

All Things Food and Drink Ltd demonstrates weak financial health with escalating net liabilities and negative working capital, heavily reliant on director loans for funding. Liquidity constraints and ongoing losses undermine its capacity to meet financial obligations. Given the current financials and cash flow profile, extending credit is not advisable without significant remedial actions or capital support.

ALL THINGS FOOD AND DRINK LTD - Analysis Report

Company Number: 13044142

Analysis Date: 2025-07-29 16:19 UTC

1. Credit Opinion: DECLINE
   All Things Food and Drink Ltd shows persistent and increasing negative net assets and net current liabilities over the last two reported years, indicating financial distress. The company’s liabilities exceed its assets significantly, with net liabilities worsening from -£35k (2022) to -£101k (2023). The director’s loan account is overdrawn by £112,785, and interest and tax charges on this loan suggest ongoing cash flow pressure. The company operates in a competitive food services sector with limited tangible asset backing and weak liquidity. Without substantial capital injection or operational turnaround, the ability to service new or existing debt is highly questionable.

2. Financial Strength:
   The balance sheet reveals a fragile financial structure. Fixed tangible assets are modest (£36.5k) compared to the large current liabilities (£485k). The company’s working capital is negative by £123k, and overall net liabilities at £101.5k reflect accumulated losses and insufficient equity. The company is reliant on director funding (loan account) to sustain operations, which poses a risk if this support ceases. The absence of long-term borrowings is positive but likely reflects limited access to formal credit. The negative retained earnings and shareholders deficit indicate ongoing losses.

3. Cash Flow Assessment:
   Cash at bank is low (£24.5k) relative to current liabilities, and the significant debtor balances (£308k) may indicate extended credit terms and potential collection risk. The increase in debtors from 2022 to 2023 (+£112k) without corresponding increase in cash suggests cash conversion cycle issues. Negative working capital and reliance on director loans imply liquidity constraints. There is no evidence of substantial cash flow from operations to cover immediate liabilities, raising concerns about short-term solvency.

4. Monitoring Points:

• Track improvement or deterioration of net current assets and net liabilities in future filings.
• Monitor director loan account movements and repayment plans.
• Review debtor ageing and collectability to assess cash flow risks.
• Watch for any capital injections or external financing to bolster equity and liquidity.
• Confirm timely filing of accounts and confirmation statements as indicators of management discipline.