ARPC SOFTWARE LIMITED

Executive Summary

ARPC Software Limited is a micro-sized software development company with a stable but minimal financial position and positive working capital. The company demonstrates adequate liquidity to meet short-term obligations but operates with limited financial depth and scale. Credit approval is recommended with modest limits and close financial monitoring to mitigate exposure to its small size and tax liabilities.

ARPC SOFTWARE LIMITED - Analysis Report

Company Number: SC690942

Analysis Date: 2025-07-29 15:53 UTC

1. Credit Opinion: APPROVE with caution. ARPC Software Limited is a micro private limited company operating in software development, with a single director and shareholder controlling 100% of voting rights and shares. The company has been trading since 2021 and filed accounts up to 31 March 2024 that show positive net current assets and shareholders' funds, indicating a modest but stable financial base. However, the company is small, with only one employee and minimal fixed assets, which implies limited financial depth and operational scale. The absence of an audit and limited disclosures restrict full assessment of profitability and cash generation. Based on current data, the company appears capable of meeting short-term obligations but is vulnerable to financial stress due to its size and thin capitalisation. Credit facilities should be modest and coupled with ongoing monitoring.

2. Financial Strength: The balance sheet shows total current assets of £22,279 (including cash of £13,595 and debtors of £8,684) against current liabilities of £18,032, resulting in net current assets of £4,247. Shareholders’ funds stand at £4,247, down from £6,080 the prior year, reflecting a slight decline in retained earnings. The company has no long-term liabilities or fixed assets disclosed, highlighting a very lean capital structure and limited asset backing. The modest positive working capital and equity position provide a buffer but are minimal. The tax creditor is significant (£16,929), which requires careful management. Overall, the financial strength is adequate for the company's scale but fragile.

3. Cash Flow Assessment: Cash at bank decreased slightly from £15,569 to £13,595 year-on-year, indicating relatively stable liquidity. Trade debtors are well matched with current liabilities, supporting operational liquidity. The net current assets position suggests the company has sufficient short-term resources to meet liabilities as they fall due. However, the company’s reliance on director funding or external support cannot be excluded due to limited internal cash generation evidence. Working capital management appears satisfactory, but the small cash buffer and tax liabilities highlight the need for careful cash flow monitoring.

4. Monitoring Points:

• Track changes in net current assets and shareholders’ funds to detect erosion of capital.
• Monitor cash balances closely, especially around tax payment dates, given the sizable tax creditor.
• Review debtor ageing and collection efficiency to avoid liquidity strain.
• Assess revenue growth and profitability trends when full accounts become available.
• Watch for any increase in liabilities or commitments beyond current levels.
• Consider director’s ability and willingness to support the company financially if needed.