Company Number: 13292728

Analysis Date: 2025-07-19 12:05 UTC

1. Credit Opinion: DECLINE
   CHICK INN STOP LTD shows persistent negative net working capital with current liabilities consistently exceeding current assets by a significant margin (£15k negative in 2024). This indicates liquidity stress and potential difficulty in meeting short-term obligations. The company’s net assets have declined from £15.4k in 2023 to £12.7k in 2024, reflecting a weakening financial position. Given the micro size and limited equity base (£100 share capital), the company appears financially fragile and lacks a strong buffer to absorb shocks or support growth. Without evidence of improved cash flow or external funding, the risk of default or payment delays is elevated.

2. Financial Strength:
   The balance sheet is modest with fixed assets around £28k and net assets of £12.7k in 2024. However, the company consistently carries negative net current assets—current liabilities outweigh current assets by about £15k, worsening from the prior year. This suggests reliance on short-term creditor funding or delayed payments to suppliers. The decline in net assets over the last year further signals that retained earnings or capital injections are insufficient to strengthen the equity base. Overall, the financial strength is weak, with limited liquidity and thin capitalization.

3. Cash Flow Assessment:
   Current assets of £9,654 in 2024 are mostly likely cash and receivables, but these are eclipsed by current liabilities of £24,901, indicating a working capital deficit. Operating cash flow is likely constrained, increasing risk of cash shortfalls. The increase in average employees from 1 to 3 may have raised operating costs without corresponding asset growth. Without the profit and loss account provided, cash generation capacity cannot be confirmed but is likely under pressure given the deteriorating net asset position and worsening working capital. This undermines the company’s ability to service debt or meet supplier terms reliably.

4. Monitoring Points:

• Monitor quarterly management accounts for improvement in net current assets and liquidity position.
• Watch for any increases in share capital or external funding to bolster financial strength.
• Track supplier payment performance and creditor aging for signs of stress.
• Review any changes in business scale or turnover given the increase in employees.
• Confirm if the company files profit and loss accounts to assess profitability trends.