Company Number: 14184113

Analysis Date: 2025-07-29 18:01 UTC

1. Credit Opinion: DECLINE
   BUD2ROSE LTD exhibits significant credit risk due to its persistent net liabilities position, negative shareholder funds, and weak working capital. The company’s balance sheet shows net liabilities of £39,601 as of June 2024, deteriorated from £12,181 the previous year. Current liabilities far exceed current assets, resulting in negative net current assets of £150,453, indicating poor short-term liquidity. The company also has substantial long-term borrowings (£282,173) secured against a leasehold property, increasing financial leverage and risk. Given the lack of profitability data and continuing losses implied by accumulating negative reserves, the company’s ability to service debt and meet obligations is doubtful.

2. Financial Strength:
   The company’s fixed assets consist primarily of investment property valued at £391,608 (fair value), which remains stable year on year. However, these assets are heavily encumbered by secured debt (£282,173 bank loan), and the company’s net asset position is negative. Negative shareholders’ funds and accumulated losses highlight erosion of capital. The company’s minimal share capital (£417) provides little buffer against financial distress. The balance sheet reflects a highly leveraged position with inadequate equity support, limiting financial flexibility.

3. Cash Flow Assessment:
   Current assets are minimal (£1,959), mostly cash (£1,748), and debtors (£211) are negligible, while current liabilities are substantial (£152,412). This results in a working capital deficit of £150,453, indicating insufficient short-term liquidity to cover immediate obligations. The sharp reduction in cash from prior year (£4,780 to £1,748) further weakens liquidity. Negative working capital and limited operating cash inflows suggest the company may struggle to meet short-term liabilities without additional financing or asset disposals.

4. Monitoring Points:

• Monitor changes in net current assets and liquidity position each period.
• Watch for any further deterioration or improvement in net liabilities and shareholder funds.
• Track servicing of secured debt and adherence to terms of the legal charge on the leasehold property.
• Review any incoming cash flows or refinancing activities that improve liquidity.
• Assess any management actions to reduce losses or improve profitability, including rent or income from investment property.
• Keep an eye on director and shareholder involvement given control concentration and potential for financial support.