Company Number: 12394076

Analysis Date: 2025-07-19 12:56 UTC

1. Credit Opinion: DECLINE
   Cape Agencies Limited shows a significant deterioration in financial position over recent years. Net assets have declined sharply from £12,429 in 2021 to only £314 in 2024, indicating weakening equity capital. The current ratio has worsened with net current assets dropping from £12,035 to only £235, pointing to increasingly tight liquidity. The company is micro-sized with minimal fixed assets and very limited share capital (£4). The director loan account fluctuates but remains a concern as it was overdrawn and only recently repaid. Given the fragile balance sheet, minimal working capital cushion, and lack of demonstrated profitability or growth, the company’s ability to service new or increased credit facilities is questionable. Without clear cash flow improvement or capital injection, risk of default is high.

2. Financial Strength
   The company’s financial strength is weak. The equity base has eroded drastically over three years, and net current assets barely cover short-term liabilities, leaving little buffer for unforeseen expenses. Fixed assets are negligible (£79) and do not provide collateral value. The micro-entity classification aligns with very small scale operations. The drop in current assets alongside fairly stable current liabilities reduces operational flexibility. Shareholders funds stand at just £314, indicating minimal retained earnings or capital reserves. The company’s financial resilience is limited.

3. Cash Flow Assessment
   Working capital is minimal with only £235 net current assets as of January 2024, compared to over £12,000 in 2021. This signals tight liquidity and restricted ability to meet short-term obligations promptly. The fluctuations in director advances—large repayments and advances—may suggest reliance on insider funding to manage cash flow gaps, which is not sustainable long-term. There is no evidence of positive cash flow from operations or significant cash reserves. The company’s cash generation capacity appears weak, increasing credit risk.

4. Monitoring Points

• Monitor quarterly updates on liquidity and working capital levels.
• Watch for any new capital injections or increases in share capital.
• Track director loan account movements for signs of continued financial support or withdrawals.
• Review forthcoming accounts for trends in profitability and cash flow improvements.
• Observe any overdue filings or changes in director appointments as governance indicators.