CAPSIZE TECHNOLOGY LTD

Executive Summary

Capsize Technology Ltd operates in a specialized leasing niche but currently faces liquidity challenges due to increased current liabilities and negative working capital. While the company remains active with positive net assets, the significant deterioration in financial strength warrants conditional credit approval with strict monitoring of cash flow and creditor management. Close attention to operational cash generation and financial discipline will be essential to mitigate credit risk.

CAPSIZE TECHNOLOGY LTD - Analysis Report

Company Number: SC677650

Analysis Date: 2025-07-29 13:23 UTC

Credit Opinion:
CONDITIONAL APPROVAL. Capsize Technology Ltd is an active private limited company operating in the niche sector of renting and leasing media entertainment equipment. The company shows ongoing operations with no overdue filings and a director with full control. However, the financials indicate persistent working capital deficits and a significant increase in current liabilities over the last year, which raises liquidity concerns. The company’s ability to service short-term debts is constrained, suggesting the need for close monitoring of cash flow and creditor management before approving credit facilities.

Financial Strength:
The company’s net assets declined from £17,923 in 2023 to £7,688 in 2024, primarily due to an increase in current liabilities from £5,227 to £20,821 and a provision for deferred tax of £2,486. Fixed assets increased modestly to £25,189, indicating continued investment in plant and machinery. The shareholder equity remains positive but has more than halved, reflecting the recent financial strain. The company is small in size with minimal share capital (£1,000) and no employees, which may limit operational scalability. Overall, the balance sheet shows weakening financial strength with a marked deterioration in liquidity position.

Cash Flow Assessment:
Current assets stand at £5,806, with cash balances of £2,980, but current liabilities total £20,821, resulting in net current liabilities of -£15,015. This negative working capital position has worsened significantly compared to prior years (e.g., -£3,507 in 2023). Trade creditors and amounts owed to associates have increased notably, suggesting reliance on supplier and related party credit to fund operations. The lack of employees and small debtor base further constrain operating cash inflows. The company’s cash position is insufficient to cover immediate obligations without additional financing or cash injection.

Monitoring Points:

• Monitor liquidity ratios closely, particularly current ratio and quick ratio, to assess short-term solvency.
• Review the ageing of trade creditors and debtors to identify any payment delays or collection issues.
• Watch deferred tax obligations and provisions for any further impact on net assets.
• Track cash flow forecasts and any changes in credit terms with suppliers or related parties.
• Assess management’s plans to improve working capital, including potential equity injections or cost controls.
• Confirm continued compliance with filing deadlines and no director conduct issues.