CADENZA FILMS LTD

Executive Summary

Cadenza Films Ltd shows signs of liquidity pressure with net current liabilities increasing and shareholders’ funds declining. While cash balances have improved, the company must manage working capital closely to meet short-term obligations. Conditional credit approval is advised, contingent on ongoing financial monitoring and evidence of improved cash flow management.

CADENZA FILMS LTD - Analysis Report

Company Number: 14062738

Analysis Date: 2025-07-19 12:26 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Cadenza Films Ltd is a relatively young private limited company operating in the video production sector. The company currently exhibits net current liabilities and a declining equity base, indicating some liquidity strain. While the business has a modest asset base and positive shareholder funds, the working capital deficiency suggests a need for careful cash flow management. Approval is recommended on a conditional basis, subject to regular monitoring of liquidity and confirmation of ongoing profitability and cash inflows.

2. Financial Strength
   The balance sheet shows tangible fixed assets of £54,230 as at 30 April 2024, down from £62,696 the previous year, reflecting depreciation charges exceeding asset additions. Current assets stand at £58,290, composed mainly of cash (£43,564) and trade debtors (£14,726). However, current liabilities total £88,610, leading to net current liabilities of £30,320, which is an increase in working capital deficit compared to the prior year. Shareholders’ funds have declined from £42,604 in 2023 to £23,910 in 2024, reflecting accumulated losses or distributions exceeding profits. The negative working capital position signals potential financial stress despite a positive net asset position.

3. Cash Flow Assessment
   Cash balances improved from £36,430 in 2023 to £43,564 in 2024, which is a positive sign for near-term liquidity. However, the increase in current liabilities, particularly 'other creditors' (£69,944), suggests the company may be relying on trade credit or has accrued expenses that need to be settled soon. The company’s ability to convert debtors (£14,726) into cash in a timely manner is critical. Given the working capital deficit, the firm’s short-term liquidity appears tight, and cash flow forecasting is essential to ensure liabilities can be met as they fall due.

4. Monitoring Points

• Net current liabilities and working capital position: Watch for any further deterioration or improvement.
• Cash conversion cycle: Timely collection of debtors and management of creditors to prevent liquidity shortages.
• Profitability and retained earnings changes in future accounts to assess if the business is moving towards sustainable earnings.
• Directors’ ability to inject capital or secure external funding if needed to support operations.
• Any overdue filings or changes in director status that may indicate operational or governance issues.