Company Number: 13885582

Analysis Date: 2025-07-29 20:19 UTC

1. Credit Opinion: APPROVE with caution.
   Child Resource Group Ltd is a very young micro-entity, incorporated in 2022, showing a significant turnaround in its financial position within two years. The latest accounts reveal positive net assets and improved working capital. However, as a small social work services company with only two employees, its scale and track record are limited. The directors are both social workers, indicating relevant sector experience but no evident financial specialization. Given the positive but early-stage financial improvement, credit approval is warranted but with ongoing monitoring and prudent limits.

2. Financial Strength:
   The balance sheet as of 29 February 2024 shows net assets of £43,889, up from a negative net asset position of £3,700 the prior year. Fixed assets are minimal (£2,080), appropriate for a service business. Current assets increased substantially to £106,188, primarily cash or receivables, while current liabilities also rose but remain comfortably covered, resulting in positive net current assets of £43,609. The company has a modest share capital of £102, indicating a small equity base typical for micro companies. Overall, the company has established a stable equity buffer and improved liquidity.

3. Cash Flow Assessment:
   The current assets to current liabilities ratio is strong at approximately 1.7 times, reflecting good short-term liquidity and working capital management. The substantial increase in current assets from the prior year suggests effective cash collection or funding inflow. No audit or detailed cash flow statement is available, but net current assets and positive net assets indicate a sufficient buffer to meet immediate obligations. The small employee base (2) limits fixed overheads, which supports cash flow resilience.

4. Monitoring Points:

• Maintain close watch on revenue and cash inflows to ensure continued positive working capital.
• Monitor any increase in liabilities, particularly short-term creditors, to avoid liquidity strain.
• Review future filings for sustained profitability and net asset growth to confirm financial stability.
• Assess directors’ adherence to regulatory and financial reporting deadlines, which are currently met.
• Given the founders’ backgrounds, evaluate management’s capability to scale and handle commercial credit obligations effectively.