COCO SOFTWARE LTD

Executive Summary

COCO SOFTWARE LTD demonstrates an active trading position with adequate liquidity and positive net current assets but is experiencing a decline in net assets and cash reserves. The company’s financial position warrants conditional credit support subject to ongoing monitoring of cash flows, profitability, and working capital management. Close attention to operational performance and tax obligations is recommended to mitigate risk.

COCO SOFTWARE LTD - Analysis Report

Company Number: 13387646

Analysis Date: 2025-07-29 16:06 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   COCO SOFTWARE LTD is a small private limited company engaged in business and domestic software development. The company is active with no overdue filings and no signs of distress. However, its financials show a downward trend in net assets and liquidity in the latest year. The company’s ability to service debt is currently adequate but weakening, so credit should be extended with conditions such as regular financial monitoring and limits on additional borrowing until financial stability improves.

2. Financial Strength:
   The balance sheet at 31 May 2024 shows net assets of £13,958, down from £22,392 the prior year, indicating a significant reduction in equity. The company holds tangible fixed assets of £1,597 and current assets of £21,686, mostly cash (£20,805), with trade debtors low at £389. Current liabilities have decreased to £9,022 from £12,879, which supports working capital adequacy, but the sharp fall in net assets suggests recent losses or distributions impacting equity. Shareholder funds entirely comprise profit and loss reserves, which have shrunk, highlighting pressure on retained earnings.

3. Cash Flow Assessment:
   Cash on hand remains the primary current asset and decreased from £31,375 to £20,805 year on year, reflecting cash outflows or reduced inflows. Debtors have fallen markedly, which may indicate tighter credit control or declining sales. Net current assets remain positive at £12,664, providing a buffer for short-term obligations. The company’s current liabilities, including corporation tax (£5,605), are manageable given available liquidity. However, the cash decline alongside reduced equity signals caution on cash flow sustainability.

4. Monitoring Points:

• Monitor monthly cash flow and liquidity ratios to ensure the company maintains sufficient working capital.
• Watch trade debtor days and turnover trends to detect any weakening in revenue or collection issues.
• Track net asset movements and profit retention to verify recovery or further erosion of equity.
• Review tax liabilities and payment patterns to avoid surprises in corporation tax or other creditor obligations.
• Assess any changes to key management or ownership, though currently control is fully held by the director Claire Owen, indicating stable governance.