Company Number: 14121823

Analysis Date: 2025-07-29 18:26 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   CNSTRCT LTD is a micro-entity with a very limited asset base and a small workforce (one employee). The company shows a significant decline in current assets and net assets during the latest financial year (2024) compared to the prior year (2023). Net assets have decreased from £7,329 to £2,527, indicating a reduction in financial strength. The current liabilities have also decreased proportionally, but the sharp drop in current assets—from £18,229 to £2,166—is a concern and may reflect reduced liquidity or asset disposals. Given the company's short operating history (incorporated 2022) and limited financial data, credit extension should be cautious and potentially limited to a small facility or subject to further financial information and cash flow forecasts. Strong personal guarantees or collateral may be advisable.

2. Financial Strength
   The balance sheet shows minimal fixed assets (£671 in 2024, down from £1,006 in 2023) and current assets of £2,166 against current liabilities of £310, resulting in net current assets of £1,856. The company maintains positive net assets of £2,527, but this is a marked decline from £7,329 the previous year. The decrease suggests the company may have drawn down cash or reduced receivables/inventories sharply, possibly indicating operational stress or investment into non-balance-sheet assets. Shareholders' funds are positive but small, reflecting the micro-entity size and limited capitalization.

3. Cash Flow Assessment
   The available data implies a significant reduction in working capital, with current assets dropping by about £16,000 year-over-year, while current liabilities declined by about £11,600. This suggests the company has less liquidity and reduced short-term financial flexibility. The ratio of current assets to current liabilities remains favorable (~7:1), but the absolute level of current assets is very low. The company’s ability to service short-term obligations appears adequate at present but is vulnerable to unexpected cash flow shocks. With only one employee and limited fixed assets, cash flow management will be critical. Further examination of cash flow statements and trade receivables/payables aging would be necessary for a thorough liquidity assessment.

4. Monitoring Points

• Continued decline or volatility in net assets and current assets should be closely monitored.
• Cash flow trends and working capital management to ensure ongoing liquidity.
• Timely filing of accounts and confirmation statements (the company is currently compliant).
• Any increase in liabilities or delays in payment to suppliers.
• Management’s ability to generate new contracts and revenue growth given the consultancy nature of the business.
• Potential reliance on director’s personal funds or guarantees, considering limited company capitalization.