Company Number: SC744766

Analysis Date: 2025-07-20 13:49 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Coopers Driving School Ltd is a recently incorporated private limited company (since September 2022) operating in the driving school sector. The company shows a positive net asset position and modest shareholders' funds. However, it has recurring net current liabilities and a significant finance lease obligation, which present liquidity risks. The director's loan and dividend payments indicate some confidence in cash flow, but the company’s ability to service debt depends on maintaining or improving cash generation. Approval is recommended with conditions requiring close monitoring of cash flow and working capital management.

2. Financial Strength:

• Net Assets increased slightly from £3,033 to £3,201 in the latest year, indicating marginal growth in equity.
• Fixed assets are mainly motor vehicles and equipment valued at approximately £15,175, which are essential to business operations.
• The company carries finance lease obligations totaling £11,770, which is a material liability relative to its asset base.
• Share capital is minimal (£2), reflecting a small equity base typical for micro or small enterprises.
• The company has maintained positive retained earnings, increasing the profit and loss reserve to £3,199.

3. Cash Flow Assessment:

• Cash at bank decreased sharply from £3,853 in 2023 to £806 in 2024, signaling tighter liquidity.
• Current liabilities of £8,407 exceed current assets of £806, resulting in a negative net working capital of -£3,567, which exposes the company to short-term liquidity risk.
• Finance lease repayments represent a fixed financial commitment, with £3,363 due within one year and £8,407 thereafter, requiring disciplined cash management.
• The director’s loan account is small and interest-free with no fixed terms, providing some flexibility.
• Dividend payment of £500 to the director suggests available distributable profits but may strain liquidity if not backed by stable cash inflows.

4. Monitoring Points:

• Track monthly cash flow and working capital to ensure short-term obligations, especially finance lease payments, can be met without delay.
• Monitor turnover and profitability trends, as these will underpin the company’s ability to sustain operations and debt servicing.
• Review director loans and dividend distributions to avoid liquidity pressures.
• Observe any changes in fixed asset usage or additional finance leases that may increase liabilities disproportionately.
• Keep watch on accounts filing and confirmation statement deadlines (next due 2025/2026) to ensure compliance and transparency.