CHAUDHRY TRADERS LTD

Executive Summary

Chaudhry Traders Ltd demonstrates a stable and clean micro-entity financial profile with positive working capital and no current liabilities, supporting a low-risk credit profile. The company’s small scale and limited complexity reduce financial risk, though liquidity remains modest and should be monitored as business activity evolves. Approval is recommended for credit facilities aligned with the company’s size and operational scope.

CHAUDHRY TRADERS LTD - Analysis Report

Company Number: 12785318

Analysis Date: 2025-07-20 15:48 UTC

1. Credit Opinion: APPROVE Chaudhry Traders Ltd shows a stable financial position with positive net current assets and net assets over the past three years, indicating an ability to meet short-term obligations. The company’s micro-entity status and absence of employees suggest a low operational complexity and cost base, reducing financial risk. Although the company is relatively young (incorporated 2020) and small, the clean balance sheet with no current liabilities at the latest year-end supports credit approval for modest facilities. The management appears stable with a new director appointed recently who also controls the majority shareholding, implying aligned interests in the company’s financial health.

2. Financial Strength: The company’s net assets decreased slightly from £7,156 in 2023 to £6,527 in 2024 but remain positive and consistent at a micro-level. Current assets consist primarily of cash or equivalents, given no stock or debtors are reported, while current liabilities were eliminated (from £821 in 2023 to zero in 2024). The balance sheet shows no long-term liabilities, which indicates a clean financial structure with no gearing or external debt burden. Shareholders’ funds equal net assets, reflecting retained earnings or capital contributions matching the balance sheet totals. Overall, the financial strength is modest but sound for the company size.

3. Cash Flow Assessment: Current assets exceed current liabilities by £6,527 in 2024, providing a positive working capital position and liquidity buffer. The elimination of creditors within one year reduces short-term payment pressures. The absence of employees suggests limited payroll outgoings, likely minimizing cash flow volatility. However, the small asset base and modest net assets imply limited cash reserves, so liquidity could be tight if business activity scales rapidly or unexpected expenses arise. Monitoring cash flows closely is recommended to ensure ongoing operational liquidity.

4. Monitoring Points:

• Track year-on-year changes in net current assets and net assets for signs of financial deterioration.
• Monitor any increase in short-term liabilities or new debt that may pressure liquidity.
• Watch for changes in directors or ownership that could impact governance or financial strategy.
• Review turnover and profitability once available, as these are critical for assessing repayment capacity beyond balance sheet strength.
• Given the company’s micro status and no employees, any sudden expansion or operational changes should be scrutinized for cash flow impact.