Company Number: 14488868

Analysis Date: 2025-07-20 15:09 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Burger8 Limited is a recently incorporated company (Nov 2022) operating in the take-away food sector. The latest financials to October 2024 show an increase in fixed assets and current assets but a significant deterioration in net current assets from positive £1,100 in 2023 to negative £15,063 in 2024, driven by a sharp rise in current liabilities to £49,376. While net assets improved to £11,400, the negative working capital indicates liquidity stress that may impact the company’s ability to meet short-term obligations. The business is still in early growth stages with a small employee base (average 6 in 2023). The director and sole shareholder, Mr. Bahary, holds full control, which can be positive for decision-making but concentrates risk. Approval is recommended with conditions: ongoing monitoring of liquidity, confirmation of cash flow improvements, and possibly requiring short-term credit support or guarantees until working capital stabilizes.

2. Financial Strength:
   The balance sheet shows modest fixed assets (£26,463) reflecting investment in plant and machinery. Shareholders’ funds increased from £1,100 to £11,400, indicating some retained earnings or capital injection. However, the current liabilities (£49,376) significantly exceed current assets (£34,313), causing a negative net current asset position. This mismatch raises concerns about short-term solvency despite positive net assets overall. The company’s size remains micro/small with limited historical financial track record, which limits trend analysis.

3. Cash Flow Assessment:
   Cash on hand increased from £2,356 in 2023 to £12,113 in 2024, which is positive, but the overall current asset composition is heavily weighted by inventory (£22,200 in 2024). High inventory relative to cash may affect liquidity if stock turnover is slow. The large increase in current liabilities needs scrutiny—if these are trade payables or accrued expenses, the company may face timing pressures to honor debts. Working capital deficits can strain operations, so cash flow forecasts and payment terms should be carefully reviewed to ensure sustainability.

4. Monitoring Points:

• Liquidity ratios: current ratio and quick ratio to monitor improvements in working capital.
• Cash flow statements (when available) to verify operational cash generation.
• Trade creditor aging to assess payment discipline and supplier relationships.
• Inventory turnover to confirm stock management efficiency.
• Any changes in director/shareholder control or capital injections.
• Timely filing of accounts and confirmation statements to maintain regulatory compliance.