Company Number: 13880220

Analysis Date: 2025-07-19 12:24 UTC

1. Credit Opinion: DECLINE
   AM DALTON LTD shows significant financial distress as of the latest accounts. The company has a net liabilities position (£14,822 negative net assets) and worsening net current liabilities (£142,374 negative working capital), indicating an inability to cover short-term obligations from current assets. The company’s financial trajectory is negative, with increasing current liabilities outpacing assets and shareholders’ funds eroding from a small positive to a deficit. There is no indication of external financial support or improving cash flow trends. Given these factors, the company presents a high risk of payment default and limited capacity to service new or existing debt.

2. Financial Strength:
   The balance sheet shows fixed assets of £127,552 comprising goodwill (£99,902) and tangible assets (£27,650), with amortisation of goodwill reducing its book value. The large goodwill component introduces some risk as it is an intangible asset that may not be readily liquidated or may require impairment if future profits do not materialize. Current assets (£176,786) are insufficient to cover current liabilities (£319,160), resulting in a negative working capital position of £142,374. The deterioration from a net asset position of £300 in 2023 to a deficit in 2024 indicates weakening financial strength. Shareholders’ funds have moved into negative territory, reflecting accumulated losses.

3. Cash Flow Assessment:
   Despite a reasonable cash balance (£141,380), the company’s current liabilities are over twice this amount, indicating cash alone cannot meet short-term debts. Debtors have increased modestly (£35,406), but this does not offset the sharp rise in creditors (£319,160). The company’s liquidity is strained, with negative net current assets suggesting working capital management issues or potentially delayed supplier payments. Without additional cash inflows or debt restructuring, liquidity risk remains high. The absence of directors’ advances or guarantees further limits immediate financial flexibility.

4. Monitoring Points:

• Continued monitoring of net current assets and cash balances for signs of improvement or further deterioration.
• Watch for any impairment of goodwill or tangible assets that could further impact net asset value.
• Track creditor payment patterns and any overdue liabilities that could trigger supplier or tax authority actions.
• Review for any changes in directors’ financial support or external funding arrangements.
• Monitor profitability trends (not disclosed here) and tax liabilities, especially corporation tax of £17,482 appearing in 2024.
• Timely filing of accounts and returns remains positive.