Company Number: 13547948

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

1. Credit Opinion: APPROVE with conditions
   Bay Tales Limited is a micro private limited company operating in artistic creation with modest financials but improving working capital. The business shows a positive net current asset position and shareholders’ funds growth in the latest period, indicating enhanced financial stability. However, given its early stage (incorporated 2021) and small scale, credit approval should be conditional on monitoring ongoing cash flow and receivables management to mitigate risk of liquidity strain.

2. Financial Strength:
   The company’s balance sheet reflects a net current asset position of £5,594 as of April 2024, up from £1,313 the previous year. Total assets less current liabilities equal shareholders’ funds at £5,594, signaling no long-term liabilities and a clean equity position. The company remains small in size with limited fixed assets (not detailed but implied by micro-entity status). The financial trajectory shows improvement in net working capital, suggesting better financial health over time.

3. Cash Flow Assessment:
   Current assets of £10,073 against current liabilities of £4,479 provide a current ratio of approximately 2.25, indicating adequate short-term liquidity. The net current assets growth from £1,313 to £5,594 suggests improved ability to meet short-term obligations. Average employee number is low (2), which limits fixed overheads. However, absolute cash and liquid assets levels are modest, so careful management of cash conversion cycles is vital.

4. Monitoring Points:

• Maintain or improve net current assets and liquidity ratios (current ratio > 2 preferred).
• Monitor accounts receivable turnover and cash conversion to prevent working capital bottlenecks.
• Watch for any increase in liabilities or decline in shareholders’ funds that may signal financial stress.
• Review director changes and governance, noting one director resigned in July 2024; stability in management is key.
• Track revenue growth and profitability trends in future filings to ensure business sustainability.