BROC2022 LIMITED

Executive Summary

BROC2022 LIMITED exhibits early-stage financial fragility with a sharp decline in net assets and negative working capital as of its latest accounts. While the company remains operational and compliant, its liquidity position is strained, warranting cautious credit exposure subject to close monitoring. Improvement in cash flow and equity is critical before considering more substantial credit facilities.

BROC2022 LIMITED - Analysis Report

Company Number: 14283071

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

1. Credit Opinion:
   CONDITIONAL APPROVAL. BROC2022 LIMITED is a very young private limited company operating in management consultancy. While it remains active and compliant with filing deadlines, the latest financials show a material deterioration in working capital and net assets within its second full year of trading. The company’s net current liabilities position and near-zero net assets as of August 2024 indicate tight liquidity and limited buffer to absorb financial shocks. Approval for credit should be conditional on close monitoring and possibly limited to short-term or secured facilities until the company demonstrates improved financial stability and cash flow generation.

2. Financial Strength:
   The balance sheet reveals a significant decline in shareholder funds from £28,473 at August 2023 to only £132 at August 2024. Fixed assets are negligible (£825) and do not provide much collateral value. Current assets increased from £55,294 to £85,179, but current liabilities rose disproportionately from £44,445 to £85,872, resulting in negative net working capital of £693. This suggests that the company has increased short-term obligations faster than its liquid resources, weakening its solvency. The micro-entity status limits the detail available, but the erosion of equity indicates operating losses or distributions exceeding profits.

3. Cash Flow Assessment:
   The negative net current assets imply the company may be relying on short-term credit or delayed payments to meet its obligations. Without a profit and loss statement included, it is unclear if operating cash flows are positive or if working capital management issues exist. The small employee base (2 persons) suggests a lean operation, but the imbalance between current assets and liabilities is a concern. Cash flow risk is elevated, and the company’s ability to service debt depends on improving receivables collection, controlling payables, or securing additional financing.

4. Monitoring Points:

• Monitor subsequent filings for signs of equity restoration or profitability.
• Track changes in working capital and liquidity ratios.
• Watch for any increases in director loans or related-party transactions that might mask cash flow issues.
• Confirm the company maintains compliance with statutory filings and no adverse credit events occur.
• Assess the business impact of the owners’ management strategy and any external market conditions affecting consultancy demand.