Company Number: NI690492

Analysis Date: 2025-07-20 16:56 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Clarence Kennedy Ltd is a very small and recently incorporated private limited company engaged in specialised design and advertising activities. The latest accounts show a sharp decline in net current assets from £19,258 in 2023 to a negative £1,177 in 2024, resulting in minimal net assets of £995. This deterioration in working capital indicates potential liquidity stress. However, the company remains active and compliant with filings, and no adverse events or director disqualifications are noted. Credit can be considered on a conditional basis, subject to regular monitoring of cash flow and receivables collections.

2. Financial Strength:
   The balance sheet reveals very limited tangible fixed assets (£2,172) and a small equity base (£995). The company’s net assets have eroded significantly compared to the prior year (£22,051), mainly due to a large increase in short-term creditors (£44,557 vs. £18,049). This suggests reliance on short-term liabilities to fund operations, which weakens financial stability. The low capital base and negative working capital raise concerns about the company’s buffer to absorb operational or market shocks.

3. Cash Flow Assessment:
   Current assets total £43,380, inclusive of cash and equivalents of £32,208 and debtors of £11,172. However, current liabilities have more than doubled, creating a net current liability position. The negative net working capital highlights potential short-term liquidity risks. Absence of a cash flow statement limits detailed analysis, but the rising creditors relative to cash and debtors may indicate delayed supplier payments or cash flow constraints. Close attention to cash generation and debtor turnover is advised.

4. Monitoring Points:

• Monitor monthly cash flow and liquidity ratios to detect stress early.
• Track debtor ageing and collection efficiency to ensure receivables convert to cash promptly.
• Review creditor payment terms and any changes in supplier relationships.
• Watch for subsequent filings and any sign of increasing liabilities or declining equity.
• Assess business development and turnover trends as new accounts become available.