ART ILLUMINATED LTD

Executive Summary

Art Illuminated Ltd is a micro-entity with improving but still fragile financial health due to negative working capital. The company demonstrates growth in shareholder funds but has constrained liquidity typical of a small retail operation. Conditional credit approval is recommended with close monitoring of cash flow and working capital metrics to mitigate short-term risk.

ART ILLUMINATED LTD - Analysis Report

Company Number: 13613246

Analysis Date: 2025-07-20 15:10 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Art Illuminated Ltd shows a modest but improving financial position as a micro-entity in the retail sector for furniture and lighting. The company is currently active and compliant with filing requirements, which supports operational transparency. However, the consistent negative net current assets indicate short-term liquidity challenges. The improving net asset position and shareholders’ funds from £6,142 in 2023 to £10,153 in 2024 demonstrate progress but caution is warranted due to thin working capital margins. Credit facilities may be approved with conditions such as a limit on exposure and regular financial monitoring to ensure liquidity and cash flow improvements continue.

2. Financial Strength:
   The balance sheet reflects very low fixed assets (£12,171) and current assets (£5,378) relative to current liabilities (£7,396) as of September 2024. The negative net current assets of £2,018, though improved from £6,947 in the prior year, indicate working capital remains tight. Shareholders’ funds have increased from £6,142 to £10,153, showing retained earnings or capital injection, which strengthens the equity base but the overall asset base remains modest. The company’s size (micro category) and single employee status suggest limited operational scale and asset backing.

3. Cash Flow Assessment:
   Current liabilities exceed current assets, signaling potential short-term cash flow pressure. The company needs to manage payables and receivables tightly to avoid liquidity shortfalls. The improvement in net current liabilities year-on-year is positive, but monitoring cash conversion cycles and ensuring prompt collections will be critical. No audit was required, so detailed cash flow data is not available, adding some uncertainty to liquidity assessment.

4. Monitoring Points:

• Working capital trends and net current asset position on future filings.
• Timeliness and completeness of statutory filings (accounts and confirmation statements).
• Any increase in current liabilities or deterioration in liquidity ratios.
• Operational scale and any changes in employment or asset base that might affect financial resilience.
• Management’s ability to sustain or grow shareholders’ funds and improve cash flows.