Company Number: 14225426

Analysis Date: 2025-07-20 12:54 UTC

1. Credit Opinion: DECLINE
   Bubble Tea Bullring Ltd demonstrates significant financial distress with persistent negative net current assets and shareholders’ funds. The company’s current liabilities substantially exceed its current assets (£534,949 vs. £240,005 in 2023), indicating poor short-term liquidity and working capital deficiencies. Despite being operational since July 2022, the company’s financial position has deteriorated further from 2022 to 2023. The large trade creditor balance (£456,971) suggests payment delays or reliance on extended supplier credit, raising collection and repayment concerns. Given these factors, the company currently lacks capacity to reliably service additional credit without significant restructuring or capital injection.

2. Financial Strength:
   The balance sheet shows tangible fixed assets of £254,064, which provides some collateral value. However, the company’s net liabilities position (£40,880 negative net assets) and increasing creditor balances undermine financial stability. Shareholders’ funds remain negative and worsened from the prior year, reflecting accumulated losses and insufficient equity buffer. Debtor balances increased markedly but are concentrated mainly in amounts owed by group undertakings (£137,874), which may not be readily convertible to cash, thus limiting effective asset liquidity.

3. Cash Flow Assessment:
   Cash at bank is low at £42,241 compared to current liabilities of £534,949, resulting in a severe liquidity gap. The negative net current assets position (-£294,944) signals ongoing working capital stress. The significant increase in trade creditors indicates the company might be delaying payments to suppliers to manage cash outflows, which is not sustainable long term. The absence of an income statement limits profitability and cash flow insight, but the balance sheet trends suggest operating cash flow challenges.

4. Monitoring Points:

• Track improvements in net current assets and reduction in creditor days to assess working capital management progress.
• Monitor cash reserves relative to short-term liabilities monthly.
• Review debtor aging and quality, particularly concerning amounts owed by group undertakings, for collectability risks.
• Evaluate any capital injections or restructuring efforts to restore positive equity and liquidity.
• Watch director actions and any changes in operational scale or expense control that impact cash flow.