BELOW MARKET VALUE LIMITED

Executive Summary

Below Market Value Limited is a newly incorporated micro-entity with negative net assets and insufficient working capital, indicating weak financial health and high liquidity risk. The company’s current balance sheet position undermines its ability to service debt or meet commercial obligations, leading to a credit decline recommendation. Close monitoring of future financial performance and capital structure changes is essential before reconsidering credit facilities.

BELOW MARKET VALUE LIMITED - Analysis Report

Company Number: 14987679

Analysis Date: 2025-07-29 20:19 UTC

1. Credit Opinion: DECLINE
   Below Market Value Limited shows significant financial distress as of the last accounts date. The balance sheet reveals current liabilities of £44,750 falling due after more than one year but no current liabilities within one year, which is unusual and suggests possible classification issues or deferral of liabilities. More critically, the company reports net liabilities of £25,113 (negative net assets), indicating insolvency on a balance sheet basis. Given the company is only one year old and already showing negative equity, its ability to service debt and meet commercial obligations is highly questionable without additional capital injection or clear evidence of cash flow improvement. The absence of fixed assets and limited current assets (£19,637) relative to liabilities further weakens the credit profile.

2. Financial Strength:
   The company is categorized as a micro-entity, with minimal fixed assets and very low current assets. The negative net assets of £25,113 confirm that total liabilities exceed total assets, signaling weak financial health and a capital deficit. The shareholder funds are shown as negative (£-25,113), which reflects accumulated losses or obligations exceeding equity. The company has a very small workforce (2 employees) and operates primarily in real estate management and agencies, which typically require working capital and liquidity to maintain operations. Overall, the balance sheet lacks robustness and demonstrates poor financial strength.

3. Cash Flow Assessment:
   Current assets of £19,637, which likely include cash and receivables, are insufficient to cover the significant liabilities due beyond one year (£44,750). The accounts show no creditors falling due within one year, which may indicate deferred payments or reclassification. The lack of fixed assets suggests minimal collateral or tangible security for lending. Given the negative net asset position and limited working capital, liquidity risk is high. There is no indication of positive cash flow from operations in the available data, and the company may rely on owner funding or external capital to sustain operations.

4. Monitoring Points:

• Track subsequent filings for improvements in net assets and liquidity position.
• Monitor any capital injections or shareholder loans that could restore positive net worth.
• Watch for overdue liabilities or changes in creditor terms that might strain cash flow.
• Review operating results and cash flow statements in future accounts to assess profitability and operational cash generation.
• Observe director conduct and any changes in company status, given the early stage and financial fragility.