BUDY LTD

Executive Summary

BUDY LTD is an early-stage micro company with negative net assets and weak liquidity, indicating a high credit risk. The current financial position does not support credit approval without significant improvement in working capital or evidence of sustainable cash flows. Careful monitoring of financial progress and capital support is essential before considering credit facilities.

BUDY LTD - Analysis Report

Company Number: 14573614

Analysis Date: 2025-07-29 19:00 UTC

1. Credit Opinion: DECLINE
   BUDY LTD is a newly incorporated micro private limited company with a very weak financial position as of its first reported period ending January 2024. The company shows net current liabilities of £819 and negative shareholders' funds of the same amount. This indicates that current liabilities significantly exceed current assets, impairing liquidity and raising concerns about the ability to meet short-term obligations. The absence of employees and minimal asset base further limit operational capacity. Without evidence of incoming cash flows, profitability, or external capital injection, the risk of default on credit facilities is high.

2. Financial Strength:
   The balance sheet reveals net liabilities of £819, reflecting a negative equity position at start-up. The company's sole asset is a nominal £155 in current assets against £974 in current liabilities, signaling insufficient working capital. No fixed assets or tangible reserves are reported. The negative net assets highlight undercapitalization and potential solvency risk. As a micro entity with limited operating history, there is no track record of financial stability or growth.

3. Cash Flow Assessment:
   The lack of positive net current assets indicates strained liquidity. With liabilities almost seven times current assets, the company appears unable to cover short-term debts from readily available resources. No cash flow statement is provided, but the minimal asset base and no employees suggest limited operational cash generation. Negative working capital and no retained earnings constrain cash flow flexibility, increasing vulnerability to cash shortages.

4. Monitoring Points:

• Improvement in net current assets and movement toward positive equity
• Evidence of revenue generation and profitability in subsequent periods
• Timely filing of accounts and confirmation statements to maintain regulatory compliance
• Any capital injections or loans from the sole shareholder to support liquidity
• Changes in director or ownership structure that may impact credit risk profile