CHIN CHIN CHOO LTD

Executive Summary

CHIN CHIN CHOO LTD is a recently established micro-entity in the licensed restaurant sector with a negative net asset position and significant working capital deficits. The company shows no current evidence of profitability or liquidity to support debt repayment, and management changes may add uncertainty. Due to its weak financial base and early stage of operations, credit approval is not recommended at this time.

CHIN CHIN CHOO LTD - Analysis Report

Company Number: 14719257

Analysis Date: 2025-07-29 20:24 UTC

1. Credit Opinion: DECLINE
   CHIN CHIN CHOO LTD is a newly incorporated micro-entity operating licensed restaurants with a negative net asset position of £47,215 at the last financial year-end. The company’s liabilities substantially exceed its assets, resulting in negative net current assets and shareholders’ funds. This indicates weak financial stability and raises concerns about its ability to meet debt obligations or sustain operations without additional capital injection. The business is still in its infancy with limited trading history and no demonstrated profitability or cash flow generation to support credit facilities. Furthermore, the recent change in director and share ownership structure may signify internal management adjustments. Given these factors, approving credit facilities at this stage presents high risk.

2. Financial Strength:
   The balance sheet shows fixed assets of only £527 against current liabilities of £107,285, with current assets of £58,268 resulting in net current liabilities of £47,742. Net liabilities of £47,215 reflect accumulated losses or unpaid obligations since incorporation. Share capital is minimal at £200, indicating limited equity buffer. The micro-entity status and short trading period mean limited financial disclosures, but the negative net asset position is a clear indicator of insufficient capitalisation and potential solvency risk.

3. Cash Flow Assessment:
   Current liabilities exceed current assets by a significant margin, suggesting immediate liquidity pressure. The company likely relies on external funding or shareholder loans to meet short-term obligations. No profit and loss account was filed, so detailed cash flow analysis is not possible; however, the negative working capital signals strained operational liquidity, raising doubts about the company’s ability to service any new credit lines.

4. Monitoring Points:

• Track subsequent financial statements for improvements in net assets and profitability.
• Monitor cash flow statements when available to assess operational liquidity trends.
• Observe management stability and any further changes in shareholding or directorship.
• Review compliance with filing deadlines and any overdue accounts or returns.
• Evaluate impact of market conditions on the licensed restaurant sector, which can be volatile.