Company Number: 12845931

Analysis Date: 2025-07-19 13:04 UTC

1. Credit Opinion: DECLINE
   Bay Ophthalmic Ltd exhibits a significant deterioration in financial position over the latest year, with net assets declining sharply from £24,884 in 2023 to £7,513 in 2024. This 70% reduction in net assets signals weakening financial resilience. The drastic fall in current assets from £28,200 to £7,435, alongside a decline in net current assets from £22,228 to £4,673, raises concerns about liquidity and working capital management. Limited scale (micro-entity category) and minimal share capital (£100) limit its financial buffer. Additionally, absence of profit and loss data restricts full assessment, but the balance sheet trends suggest cash flow and profitability pressures. The company’s ability to service new or existing credit facilities is questionable without evidence of improved profitability or cash inflows.

2. Financial Strength:
   The balance sheet shows very modest fixed assets (£2,840), indicating limited physical collateral. The sharp contraction in current assets primarily cash or receivables, from £28,200 to £7,435 is a negative signal. Current liabilities have reduced but not proportionally, leading to lower net current assets and reduced working capital cushion. Shareholders’ funds have dropped substantially, reflecting accumulated losses or distributions exceeding profits. Overall, the company’s financial strength is weak with minimal equity buffer and declining liquidity, increasing risk for creditors.

3. Cash Flow Assessment:
   Current assets to current liabilities ratio has fallen from approximately 4.7x in 2023 to about 2.7x in 2024, indicating a tightening liquidity position. While still above 1, the downward trend suggests working capital management issues or delayed cash conversion cycle. The company employs only 2 staff, indicating low operating scale, but without P&L or cash flow statements, it is difficult to confirm operational cash generation. The decline in net current assets and net assets suggests cash outflows or reduced cash inflows, raising concerns about ability to meet short-term obligations comfortably.

4. Monitoring Points:

• Monitor quarterly cash flow statements or bank statements to verify liquidity status and cash conversion efficiency.
• Watch for filing of full accounts including profit and loss to assess operating profitability and cash generation.
• Track changes in current assets and liabilities to identify any worsening working capital or payable delays.
• Observe any capital injections or director loans that may support liquidity in near term.
• Review any changes in director appointments or company status for signs of distress.