Company Number: SC676826

Analysis Date: 2025-07-29 20:21 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Chimera Tales Ltd is a micro private limited company in the software development sector, currently active with no overdue filings, indicating compliance discipline. The company shows a significant decline in net assets and working capital over the latest reported period ending March 2024 compared to previous years. While the directors appear stable and have relevant industry experience, the recent financial contraction raises concerns about cash flow sustainability and profitability. Approval is recommended with conditions that include monitoring liquidity and requiring updated management accounts to assess ongoing repayment capacity.

2. Financial Strength:
   The company’s net assets decreased markedly from £11,078 as of October 2023 to £3,086 at March 2024, reflecting a reduction in shareholder equity and overall financial strength. Fixed assets are minimal (£699), indicating limited long-term investment, and current assets have fallen by more than half from £10,894 to £4,213. Current liabilities have increased to £1,826, contributing to a substantial drop in net current assets (working capital). This suggests tighter balance sheet liquidity and potentially strained resources to meet short-term obligations.

3. Cash Flow Assessment:
   The working capital position has deteriorated significantly, indicating reduced operational cash buffers. Current assets are just over double current liabilities, but the steep decline in cash or equivalents (implied by current assets drop) reduces financial flexibility. The small share capital (£3) and micro company status limit the equity base. Average employee numbers have decreased slightly, possibly reflecting cost-cutting, but cash flow from operations is not visible and should be verified. Overall, liquidity appears constrained, and the ability to service debt or meet commercial credit terms may be impacted if the trend continues.

4. Monitoring Points:

• Regular review of updated management accounts and cash flow forecasts
• Monitoring net current assets and trends in debtor and creditor days
• Assessment of profitability and cash generation in subsequent periods
• Director engagement and any changes in control or operational strategy
• Industry developments impacting software product demand and revenue streams