Company Number: 14817574

Analysis Date: 2025-07-20 11:53 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Compound Paraplanning Limited is a newly incorporated private limited company (2023) with a small scale of operations. The financials show modest net assets and negative working capital, indicating tight liquidity. However, director loans have been injected to support cash flow, demonstrating management commitment. The company is not in liquidation or administration, and filings are up to date. Given the early stage and limited financial strength, credit approval should be conditional on ongoing monitoring of liquidity and receivables collection.

2. Financial Strength:

• Net assets have increased from £406 in 2023 to £544 in 2024, showing some growth though still very small.
• Fixed assets are minimal (£3,750), reflecting limited capital investment.
• Current liabilities (£25,810) exceed current assets (£23,354), resulting in negative net current assets of -£2,456, which is a concern for short-term solvency.
• Deferred tax provision has increased, but remains modest at £750.
• Shareholders’ funds are low at £544, indicating limited equity buffer.
• The company is classified as a small entity operating in business support services, with limited financial history to assess long-term viability.

3. Cash Flow Assessment:

• Cash at bank improved significantly from £2,054 to £10,074, supported by director loans that have been largely repaid and partially reinstated at small balances, showing active management of liquidity.
• Debtors increased substantially (£13,280 vs £5,938), which could strain cash flow if collection is slow.
• The company holds negative working capital, which means it relies on either quick turnover of receivables or external funding to meet short-term obligations.
• The directors appear to be providing financial support, which mitigates immediate liquidity risk but is not sustainable long-term.

4. Monitoring Points:

• Closely monitor debtor days and cash conversion cycle to ensure receivables are collected promptly and cash flow remains positive.
• Watch current liabilities and creditor terms to avoid liquidity crunches due to payables exceeding cash resources.
• Review director loans and related party transactions for sustainability and impact on company solvency.
• Track profitability and reserves accumulation as future financial statements become available to assess business growth and financial resilience.
• Ensure timely filing of accounts and confirmation statements to maintain compliance and transparency.