Company Number: 12624436

Analysis Date: 2025-07-20 15:56 UTC

1. Credit Opinion: DECLINE
   BISMAA LTD presents a weak credit profile with persistent net current liabilities and negative net assets over the last four years. The company consistently shows a working capital deficit, indicating insufficient short-term liquidity to meet obligations when due. Its negative shareholders' funds reflect accumulated losses and erosion of equity, raising concerns about its ability to service debt or sustain new credit facilities without external support. The absence of any significant cash buffer or tangible assets further limits financial flexibility. Given these factors, the risk of default or insolvency is notable, and credit extension is not recommended at this time.

2. Financial Strength:
   The balance sheet reveals persistent net liabilities of £4,344 at 31 May 2024, worsening slightly from £3,788 the previous year. Current assets of £11,590 (largely inventory and minimal debtors) fall short of current liabilities of £15,934, resulting in a negative working capital position of £4,344. The company's share capital is nominal (£1), and accumulated losses have driven shareholders' funds into negative territory. Fixed assets are not reported, indicating limited capital investment or collateral value. Overall, financial strength is weak with no equity cushion and deteriorating net asset position.

3. Cash Flow Assessment:
   Cash at bank increased from £805 to £4,039 over the year, showing some improvement in liquidity, but remains low relative to current liabilities (£15,934). The company holds inventory of £7,550, which may not be highly liquid or easily convertible to cash. Debtors are negligible (£1), indicating limited receivables generation. The persistent negative net current assets highlight a structural working capital deficit, suggesting reliance on external funding or delayed creditor payments to sustain operations. The single employee and small scale may limit operational cash burn, but current cash flow coverage is insufficient for new debt servicing.

4. Monitoring Points:

• Working Capital: Watch for improvement or further deterioration in current asset coverage over liabilities.
• Cash Balances: Track cash generation trends and whether cash reserves increase relative to liabilities.
• Profitability: Monitor for a turnaround in profit and loss reserves to restore equity.
• Creditor Payment Terms: Assess whether creditor aging worsens, indicating liquidity stress.
• Director Involvement: Continued oversight of the sole director’s management decisions impacting financial health.