CHATHAM SOLUTIONS LTD

Executive Summary

Chatham Solutions Ltd demonstrates a stable but small-scale financial profile with adequate liquidity and positive net assets. Despite a recent decline in net asset value, the company maintains a strong working capital position and low liabilities, supporting its ability to meet short-term obligations. Credit approval is recommended with a conservative exposure and regular monitoring of liquidity and profitability trends.

CHATHAM SOLUTIONS LTD - Analysis Report

Company Number: 13827416

Analysis Date: 2025-07-29 20:17 UTC

1. Credit Opinion: APPROVE with caution. Chatham Solutions Ltd is a micro-entity with a very limited operating history, incorporated in 2022. The company shows positive net assets and net current assets, indicating solvency and ability to meet short-term liabilities. However, the significant reduction in current assets and net assets from 2023 to 2024 warrants monitoring. The director’s loan balance is minimal and stable, showing no unusual related party transactions. Given the small scale and limited financial history, credit exposure should be modest and reviewed regularly.

2. Financial Strength: The balance sheet shows total net assets of £23,812 as at 31 January 2024, down from £31,678 the previous year. Fixed assets are negligible (£219) and mostly current assets are cash or equivalents (£24,228). Current liabilities are very low (£556), providing strong working capital of £23,672. The company has a positive equity base entirely funded by retained earnings and minimal share capital (£2). Overall, the financial position is sound for a micro-business but shows a decline in net assets suggesting a reduction in liquidity or profitability.

3. Cash Flow Assessment: Current assets consist largely of cash or equivalents, providing good liquidity to cover current liabilities. The net current assets position is strong, and there are no indications of overdue payables or significant creditor pressure. The stable director loan account (£208) does not pose a risk. However, the drop in current assets from £42,163 to £24,228 should be investigated to ensure it is not due to cash burn or receivables write-offs. Working capital management appears satisfactory but close attention to cash flow trends is recommended.

4. Monitoring Points:

• Track changes in current assets and liabilities to ensure liquidity remains adequate.
• Monitor profitability and cash flow generation to prevent further erosion of net assets.
• Review director loan account for any unusual changes or advances.
• Assess any business developments or changes in trading that may impact credit risk.
• Confirm timely filing of accounts and returns to avoid regulatory or reputational risks.