BLACK PHEONIX LTD

Executive Summary

Black Pheonix Ltd is financially distressed with worsening net liabilities and severe liquidity issues, indicating high credit risk. The company lacks sufficient working capital and equity to support debt servicing, leading to a decline recommendation. Close monitoring of liabilities and operational cash flow is essential should circumstances change.

BLACK PHEONIX LTD - Analysis Report

Company Number: SC684415

Analysis Date: 2025-07-29 19:38 UTC

1. Credit Opinion: DECLINE
   Black Pheonix Ltd shows significant financial distress with persistent and deepening net liabilities. The company’s net assets have deteriorated from -£119k in 2023 to -£147k in 2024, reflecting worsening balance sheet solvency. Current liabilities vastly exceed current assets by over £150k, indicating severe working capital deficiency and poor short-term liquidity. The absence of positive cash reserves and the lack of equity buffer raise substantial concerns about the company’s ability to meet debt obligations on time. Given the micro-entity status and limited operational scale (one employee), the financial trajectory is negative with no clear evidence of turnaround or improved cash flow. These factors lead to a recommendation to decline credit exposure.

2. Financial Strength:
   The company’s balance sheet is weak and deteriorating. Fixed assets have sharply declined from £129k in 2023 to under £4k in 2024, signaling possible asset disposals or impairments. Current liabilities are approximately £158k while current assets stand at only £5k, yielding a negative working capital of around -£150k. Total net liabilities of £147k indicate insolvency on a balance sheet basis. Shareholders’ funds are negative, reflecting accumulated losses and no capital cushion. The lack of long-term creditors in 2024 may indicate refinancing or repayment of some debt but has not improved net asset position. Overall, the company’s financial strength is poor with high leverage and limited asset backing.

3. Cash Flow Assessment:
   Current assets are almost negligible compared to current liabilities, suggesting acute liquidity risk. The company has only one employee and appears to operate on a very small scale, limiting operating cash inflows. The absence of disclosed profit and loss accounts restricts detailed cash flow analysis, but the balance sheet implies ongoing cash drain. The negative working capital and net liabilities imply the company may struggle to generate sufficient cash to meet short-term commitments without additional funding or asset sales. The company’s micro-entity classification and exemption from audit indicate limited financial transparency, increasing risk.

4. Monitoring Points:

• Monitor changes in current liabilities and whether the company can reduce short-term debt or restructure payment terms.
• Track fixed assets movements for signs of disposals or impairment that could impact operational capability.
• Review any new filings for profit and loss performance to assess if revenues and margins improve.
• Watch for director’s reports or notes indicating plans for financial recovery or additional capital injections.
• Observe any changes in ownership/control or director appointments that might influence financial stewardship.