ARDEELIN LTD

Executive Summary

Ardeelin Ltd presents a high credit risk profile due to negligible equity, persistent negative working capital, and heavy reliance on director advances for funding. The company lacks independent cash flow generation and financial resilience, making it unsuitable for credit extension without significant mitigating factors. Ongoing monitoring of director funding and operational performance is essential to reassess creditworthiness in the future.

ARDEELIN LTD - Analysis Report

Company Number: NI691745

Analysis Date: 2025-07-29 15:41 UTC

1. Credit Opinion: DECLINE
   Ardeelin Ltd’s financials indicate a precarious position primarily due to significant director advances recorded as negative balances, suggesting the company owes substantial amounts to its directors (£1.5 million). The company shows negligible net assets (£2) and consistent net current liabilities (-£28) across the last three years. The massive director credit implies informal financing rather than operational cash flow, raising concerns about the company’s ability to service external debt or meet commercial obligations independently. Given the lack of profitability, minimal tangible assets, and reliance on director funding, extending credit would carry high risk.

2. Financial Strength: Very Weak
   The balance sheet reveals extremely limited fixed assets (£30) and current assets heavily skewed by director advances rather than liquid or operational assets. The current liabilities exceed current assets by £28, indicating negative working capital. Shareholders’ funds remain at a nominal £2, showing no equity cushion. The financial structure lacks robustness, with no evidence of retained earnings or reserves, and the company is dependent on director funding to sustain operations.

3. Cash Flow Assessment: Poor Liquidity and Working Capital
   Current liabilities slightly exceed current assets, resulting in negative net current assets. The £1.5 million director credit, effectively a related-party loan, masks true liquidity constraints. The absence of operating cash flow data and reliance on director advances highlight a lack of independent cash generation. This limits the company’s ability to meet short-term obligations or respond to unexpected cash needs without further director support.

4. Monitoring Points:

• Track director advances and repayments to assess ongoing reliance on insider funding.
• Monitor any changes in current liabilities and assets to detect improvement or deterioration in working capital.
• Review future accounts for evidence of operational cash flow and earnings generation.
• Watch for timely filing of accounts and confirmation statements as indicators of management discipline.
• Assess any changes in ownership or director conduct that may impact governance and control.