Company Number: 13910927

Analysis Date: 2025-07-29 13:53 UTC

1. Credit Opinion: DECLINE
   Capbal (Braco) Limited shows significant financial weakness despite being active and recently incorporated (2022). The company has no turnover reported over the last two years and is operating at a loss (£358,693 loss for 2023). The balance sheet reveals a net liability position (£461,761 negative shareholders’ funds) and a current liabilities level (£7.09 million) that drastically exceeds current assets (£1.06 million). The company is highly leveraged with long-term liabilities exceeding total assets, suggesting reliance on external financing or loans that it is unlikely to service comfortably. Without revenue generation and with deteriorating equity, the risk of default is high.

2. Financial Strength:
   The company’s financial position is fragile. Fixed assets increased substantially from £374k in 2022 to £5.59 million in 2023, likely reflecting capital expenditure but funded predominantly through debt, as evidenced by the increase in long-term creditors from £485k to £7.09 million. This heavy gearing places the company in a vulnerable position. Negative net assets indicate insolvency on a balance sheet basis. The absence of turnover and continued losses erode capital further. The financial structure lacks resilience to adverse conditions, with no equity cushion and high interest costs (£219,776 in 2023) compounding losses.

3. Cash Flow Assessment:
   Despite a high cash balance (£944k), this is insufficient to cover current and especially long-term liabilities. The company’s net current assets are positive (£1.04 million), suggesting short-term liquidity is adequate, but the overwhelming long-term debt raises concerns about sustained cash flow generation to meet interest and principal obligations. The lack of trading income means the company is currently dependent on financing or parent company support to fund operations and debt service. Working capital management appears stable in the short term but is overwhelmed by the overall leverage.

4. Monitoring Points:

• Revenue generation: The key indicator of turnaround will be the commencement and growth of turnover.
• Debt servicing: Monitor interest payments and creditor demands, especially given the large long-term liabilities.
• Cash burn rate and burn-down of cash reserves.
• Capital structure changes: Any equity injections or debt restructuring to improve solvency.
• Directors’ actions and strategic plans to move towards profitability.