CLK METAL SHAPING AND SHARPENING SERVICES LTD

Executive Summary

CLK Metal Shaping and Sharpening Services Ltd operates on a very small financial scale with limited assets and working capital. While it currently maintains positive net assets and liquidity, the company’s minimal financial buffer warrants cautious credit exposure with conditions and regular monitoring. The company’s ability to service credit facilities relies on tight cash flow management and stable operational performance.

CLK METAL SHAPING AND SHARPENING SERVICES LTD - Analysis Report

Company Number: 13570850

Analysis Date: 2025-07-29 14:05 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   CLK Metal Shaping and Sharpening Services Ltd is a very small enterprise, classified as a micro-entity, with limited financial scale and resources. The company shows positive net current assets and a small but positive net asset base, indicating minimal but stable working capital. However, the absolute values are very low (£194 net assets as of 31 May 2024), reflecting a fragile financial position. The company has no significant fixed assets and is dependent on maintaining tight control over its current liabilities and cash flows. Given the limited financial buffer and scale, credit approval should be conditional on close monitoring of cash flow and receivables management, with conservative facility limits and possibly requiring personal guarantees or collateral.

2. Financial Strength:
   The balance sheet reflects a micro-entity with total net assets of only £194 at the latest year-end, increasing slightly from £146 the prior year. Current assets are primarily cash or equivalents and short-term receivables at £2,514, offset by current liabilities of £2,320. The net current assets position is positive but very limited (£194), indicating constrained working capital. There are no fixed assets reported, so the company lacks tangible asset backing. Shareholders’ funds mirror net assets, indicating no long-term debt. The financial structure is equity-financed but very thin, leaving limited room to absorb shocks or fund growth internally.

3. Cash Flow Assessment:
   Working capital is positive but marginal, implying tight liquidity management is essential. Current liabilities have decreased from £3,617 to £2,320 year-on-year, which is a positive trend, but current assets also declined. The small scale means any delay in receivables or unexpected expenses could impact liquidity severely. The company’s ability to service debts depends heavily on maintaining current asset levels and controlling short-term obligations. No detailed cash flow statement is provided, but the micro-entity status and minimal net assets suggest limited cash reserves.

4. Monitoring Points:

• Track current ratio and net current asset trends closely, ensuring liquidity remains positive.
• Monitor payables and receivables aging to avoid cash flow bottlenecks.
• Watch for any increase in short-term borrowing or liabilities that could strain working capital.
• Review director’s updates or accounts for any changes in business scale or operational risks.
• Assess the impact of any broader market or economic changes on this niche repair and metal services sector.
• Confirm ongoing compliance with filing deadlines and absence of late filings or penalties.