CARTER SOFTWARE DEVELOPMENT LIMITED
Company number 07829810 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Credit Analysis: Carter Software Development Limited
1. Credit Opinion: CONDITIONAL
The company presents a strong balance sheet with net assets of £1.07M and minimal leverage, but significant concerns around the dramatic and sudden growth trajectory from a dormant state, limited financial disclosure under micro-entity filing, and lack of transparency regarding asset composition and revenue generation. Approval is conditional upon satisfactory explanations for the rapid asset accumulation and verification of cash/debtor composition.
Key Condition: Full management accounts required to verify revenue sustainability, profit margins, and the nature of current assets before any facility is drawn.
2. Financial Strength
Balance Sheet Summary (as at 30 November 2025)
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Total Assets | £1,217,476 | £927,631 | £616,156 |
| Total Liabilities | £145,640 | £139,709 | £67,627 |
| Net Assets | £1,071,836 | £787,922 | £548,529 |
Positive Indicators: - Net assets grew 36% YoY (£787k → £1.07M) and 95% over two years - Shareholders' funds fully retained — no long-term debt visible - Current ratio approximately 8.4x (£1.22M assets vs £146k liabilities) - Liabilities modest and growing far slower than assets
Concerning Factors: - The company held just £2 in net assets from incorporation (2011) through 2022, then accumulated over £1M within three years. This warrants scrutiny — is this organic revenue growth, asset transfers from related entities, or a single large contract? - Micro-entity filing means zero visibility on revenue, cost of sales, or operating profit. We cannot assess margin quality or earnings sustainability. - No split between fixed and current assets is disclosed. If the £1.22M in current assets is predominantly trade debtors rather than cash, there is meaningful collection and concentration risk. - Share capital remains at £1, meaning retained profits constitute virtually all equity. This is positive if genuinely earned, but the speed of accumulation from dormancy raises questions.
Leverage Assessment: Essentially nil. The company carries no long-term liabilities and current liabilities are well-covered. However, this also means we have no track record of debt servicing capability.
3. Cash Flow Assessment
Working Capital Position: - Net current assets: £1,071,836 - No creditors falling due after one year
The working capital position appears exceptionally strong on paper. However, the micro-entity accounts provide no cash flow statement, no turnover figure, and no breakdown of current assets between cash, trade debtors, and other receivables.
Critical Unknowns: - Cash vs Debtors: Without knowing the composition of the £1.22M current assets, we cannot assess true liquidity. A £1M debtor book with 90-day terms behaves very differently than £1M on deposit. - Revenue Visibility: We have no top-line figure. The year-on-year asset growth could indicate anything from £500k to £5M in revenue — the margin implications are dramatically different. - Creditor Profile: The £146k in current liabilities is manageable, but we don't know what it comprises (trade creditors, HMRC, accruals). Corporation tax liabilities would indicate profitability but also create a defined obligation. - Operational Cash Requirements: With only 2 employees (likely the directors), the overhead base is low, but we cannot assess ongoing contractual commitments or working capital needs.
4. Monitoring Points
If the facility is approved subject to conditions, the following require ongoing surveillance:
| Metric | Rationale | Frequency |
|---|---|---|
| Management Accounts | Revenue, margin, and cash/debtor split verification | Quarterly |
| Debtor Ageing Analysis | Concentration risk and collection quality | Quarterly |
| Revenue Concentration | Single-client dependency risk given rapid growth | Annually |
| Corporation Tax Filing | Confirmation of profitability and compliance | Annually |
| Related Party Transactions | Asset transfers from connected entities must be disclosed | Annually |
| Filing Compliance | Accounts and confirmation statement timeliness | Ongoing |
| Director Conduct | Monitor for disqualification proceedings | Ongoing |
Specific Enquiries Required Before Drawdown: 1. Source and nature of the rapid asset accumulation post-2022 2. Breakdown of current assets between cash, trade debtors, and other 3. Client concentration — what percentage of revenue comes from the top 3 clients? 4. Are the directors drawing salary or dividends, and what is the ongoing remuneration commitment? 5. Nature of the £146k current liabilities — trade, tax, or other obligations?