CARELIA LTD

Executive Summary

CARELIA LTD maintains a stable and liquid financial position with net assets rising and strong cash coverage over current liabilities, supported by director funding. However, limited operating history, absence of profit data, and reliance on unsecured director loans require a cautious credit approach. Conditional approval is recommended with ongoing monitoring of profitability, cash flow, and management stability to mitigate emerging risks.

CARELIA LTD - Analysis Report

Company Number: 12655258

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

1. Credit Opinion: CONDITIONAL APPROVAL
   CARELIA LTD demonstrates a modest but stable financial base with net assets increasing from £50,000 in 2023 to £56,350 in 2024. The company benefits from strong liquidity with cash balances of £45,000, well in excess of current liabilities (£13,650). However, the company is relatively young (incorporated 2020) and operates with a very small capital base (£10 share capital) supported mainly by a director’s interest-free loan of £13,650. The loan is repayable on demand and unsecured, which introduces some risk in case of liquidity stress. The absence of detailed profit and loss data limits visibility of operating profitability and cash flow generation. Directors have changed recently, indicating potential management transition risk. Overall, credit can be extended but with monitoring and possibly limited facility size until more operating history and profitability evidence is available.

2. Financial Strength:
   The balance sheet shows a healthy net asset position of £56,350, supported by cash and tangible fixed assets (£25,000). Net current assets of £45,000 provide comfortable short-term coverage of liabilities. The director’s loan (£13,650) is a non-interest bearing, repayable on demand liability, which while supportive, could be a volatility point if repayment was required suddenly. The company’s capital structure is very light, with minimal share capital and reliance on director funding. There is no indication of long-term debt or external borrowings. Growth in net assets from prior years suggests modest accumulation of retained earnings or revaluation, though profit details are not disclosed.

3. Cash Flow Assessment:
   High cash holdings relative to current liabilities indicate strong liquidity and working capital management. No external debts or bank borrowings reduce financial risk. However, the company's cash is primarily from director loans and initial funding rather than confirmed operational cash flow, as no profit and loss statement is provided. The company’s ability to generate positive operating cash flow and repay the director loan sustainably is unverified. Monitoring of cash flow from operations will be critical to assure ongoing liquidity.

4. Monitoring Points:

• Track future filing of profit and loss accounts to assess operating profitability and cash flow generation.
• Monitor director loan status and any repayments or additional advances.
• Watch for further changes in management or directors that could impact business continuity.
• Review upcoming filings for overdue or delayed accounts which might indicate financial stress.
• Keep an eye on any increases in liabilities or borrowings and changes in cash balances.