C2C HEATING SOLUTIONS LTD

Executive Summary

C2C Heating Solutions Ltd is a very small manufacturing business showing modest equity growth but operating with negative working capital and limited cash reserves. While currently meeting filing obligations and maintaining positive net assets, the company relies on director loans to support liquidity. Conditional credit approval is advised, subject to close monitoring of cash flow and working capital management.

C2C HEATING SOLUTIONS LTD - Analysis Report

Company Number: 14364588

Analysis Date: 2025-07-20 16:08 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   C2C Heating Solutions Ltd, incorporated in 2022, operates in the manufacture of central heating radiators and boilers. The company shows modest net assets (£2,856) and a small net current liability position (-£3,311) at the most recent year-end (September 2024). While not demonstrating strong liquidity, the company is maintaining positive shareholders’ funds and has not defaulted on filings or shown signs of distress. However, the negative working capital and reliance on director loans (£6,090) indicate some short-term liquidity pressure. Credit approval is recommended with conditions including monitoring liquidity closely and confirmation that director loans are repaid or replaced with more stable financing.

2. Financial Strength
   The balance sheet reveals low tangible fixed assets (£7,614) and limited cash reserves (£5,715). Current liabilities (£22,882) exceed current assets (£19,571), resulting in negative net current assets. Despite this, net assets remain positive due to minimal long-term liabilities and accumulated profits retained in the business. Shareholders’ funds increased from £2,119 to £2,856 year-on-year, showing some growth in equity base. The company is small with only 2 employees, which suggests a lean cost structure but also limited operational scale.

3. Cash Flow Assessment
   Cash at bank is low and net current liabilities suggest working capital constraints. Debtors (£13,856) represent a significant portion of current assets, so timely collection is critical for meeting short-term obligations. The company extended interest-free loans to directors (£6,090), which may strain liquidity further unless recovered promptly. The absence of audit implies limited external assurance on cash flow quality. Overall, cash flow appears tight and the company may be vulnerable to payment delays or unexpected expenses.

4. Monitoring Points

• Liquidity ratios: Current ratio and quick ratio to assess improvement or deterioration in working capital.
• Director loans: Track repayment or conversion to formal debt to reduce liquidity risk.
• Debtor aging: Monitor collection periods to ensure cash inflows remain steady.
• Profitability trends: Watch for consistent profit generation to build reserves and strengthen equity.
• Timely filing of accounts and returns to avoid regulatory penalties and maintain transparency.