BAKER CAPITAL MANAGEMENT LIMITED

Executive Summary

Baker Capital Management Limited presents a weak credit profile characterized by negative net assets and poor liquidity. The company’s current financial position shows insufficient working capital and high leverage secured by investment property valued at director’s estimate. Without clear evidence of operational cash flow or equity strengthening, the risk of default or financial distress is elevated, leading to a credit decline recommendation.

BAKER CAPITAL MANAGEMENT LIMITED - Analysis Report

Company Number: 13168407

Analysis Date: 2025-07-20 12:25 UTC

1. Credit Opinion: DECLINE. Baker Capital Management Limited shows persistent negative net assets and shareholders’ funds, indicating insolvency on a balance sheet basis. The company’s liabilities exceed its assets primarily due to significant secured bank loans. Current liabilities substantially exceed current assets, resulting in negative working capital and poor short-term liquidity. Without evidence of profitability or cash flow improvements, the ability to service debt and meet obligations is highly questionable. The company operates in real estate management and investment, but no turnover or profit figures are provided to demonstrate operational cash inflows or growth. Given the financial structure and limited equity cushion, credit exposure would be high risk.

2. Financial Strength: The balance sheet reveals fixed assets (investment property) valued at £517,538, offset by secured bank loans of £391,555. However, net liabilities of £2,275 and negative shareholders’ funds reflect accumulated losses or deficits. The company’s capital structure is weak with only £1 share capital and no retained earnings or reserves. The stability of the fixed asset valuation is critical, but the accounts note these are held at director’s valuation without external audit or revaluation, which may impact reliability. The sizeable long-term debt relative to asset values limits financial flexibility.

3. Cash Flow Assessment: Cash on hand is minimal (£11,170 at year end 2024), and current liabilities (£139,428) exceed current assets (£11,170 cash only, no reported debtors or inventory) leading to a negative net current asset position of -£128,258. This indicates significant liquidity constraints and potential difficulty in meeting short-term obligations without refinancing or asset disposals. The lack of working capital and reliance on bank loans secured against investment property suggests cash flow risk if rental income or management fees do not cover debt servicing costs.

4. Monitoring Points:

• Monitor changes in net assets and shareholder funds for signs of capital restoration or further erosion.
• Track cash flow from operations and any new revenue streams or contracts to assess liquidity improvements.
• Assess any revaluations of investment property or asset disposals that affect collateral value and loan-to-value ratios.
• Watch for timely repayment or restructuring of bank loans and covenant compliance.
• Review director reports or additional disclosures for strategic plans addressing financial weaknesses.