Company Number: 12799368

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

1. Credit Opinion: DECLINE
   CHIN & NIC LTD exhibits persistent and growing net current liabilities and negative shareholders' funds over the last several years, with net current liabilities worsening from -£730 in 2021 to -£29,862 in 2024. The company operates as a micro-entity licensed restaurant with very limited equity (£2 share capital). The consistent negative net asset position and working capital deficiency indicate weak financial health and limited ability to service additional debt or credit facilities. Without clear evidence of profitability or cash flow improvements, the credit risk is high.

2. Financial Strength:
   The balance sheet reveals a fragile financial position. Current assets (£68,481) are insufficient to cover current liabilities (£98,343), resulting in net current liabilities of -£29,862. The company has no fixed assets disclosed and total net assets are negative by the same amount. Shareholders’ funds are negative and have deteriorated year-on-year. This indicates accumulated losses and an erosion of equity. The micro-entity status limits disclosure but the available data reflect an ongoing capital deficiency and weak solvency.

3. Cash Flow Assessment:
   The company’s net current liability position signals liquidity constraints and possible reliance on external financing or director support to meet short-term obligations. There is no direct cash flow statement provided, but the negative working capital position and increasing creditor balances suggest cash flow pressures. With only two employees and minimal share capital, the ability to generate sufficient operating cash flow to cover debts appears limited. The absence of an audit and profit & loss details reduces insight into operational cash generation.

4. Monitoring Points:

• Monitor quarterly management accounts or interim results for cash flow trends and profitability improvements.
• Watch for changes in creditors and debt repayment patterns to assess liquidity management.
• Observe any capital injections or director loans that may support financial stability.
• Track industry conditions affecting licensed restaurants, especially post-pandemic recovery and inflationary pressures.
• Review directors’ conduct and any changes in control or management that might impact governance and financial stewardship.