COPSOURCE LTD

Executive Summary

Copsource Ltd demonstrates a weak financial position with persistent negative net assets and working capital deficits, reflecting an inability to meet liabilities from current resources. The company relies heavily on directors' loans for funding, indicating limited external creditworthiness and heightened financial risk. Without clear signs of turnaround or capital support, extending credit facilities is not recommended at this time.

COPSOURCE LTD - Analysis Report

Company Number: 13032805

Analysis Date: 2025-07-20 13:38 UTC

1. Credit Opinion: DECLINE
   Copsource Ltd shows persistent negative net assets and net current assets over the last four financial years, with net liabilities worsening from -£17,530 in 2020 to -£25,398 in 2023. The company’s current liabilities significantly exceed current assets, indicating ongoing liquidity strain. A substantial portion of current liabilities comprises directors' loan accounts (£72,173 in 2023), which may not be immediately repayable by the company. There is no sign of profitability or capital injection to address the deficit. This financial profile signals an inability to service external debt or new credit facilities reliably without material risk.

2. Financial Strength:
   The balance sheet reveals weak financial health. The company’s tangible current assets (£52,056 in 2023, primarily stock) are insufficient to cover short-term liabilities (£77,454), resulting in negative working capital of -£25,398. Shareholders' funds are negative and worsening, reflecting accumulated losses and no retained earnings. The minimal share capital (£2) underscores limited equity buffer. Reliance on directors' loans to fund operations suggests fragile capitalization and lack of external funding sources.

3. Cash Flow Assessment:
   Cash holdings are low and relatively stagnant (£6,378 in 2023 vs. £6,035 in 2022), offering minimal liquidity cushion. Negative net current assets imply working capital deficits that could impair day-to-day operations. The company’s cash flow from operations is not provided but the balance sheet suggests ongoing cash pressure, likely due to inventory build-up and high creditor balances. No evidence of improving cash conversion or reduction in liabilities is apparent.

4. Monitoring Points:

• Watch for changes in directors’ loans and whether these are being converted into equity or repaid.
• Monitor inventory turnover and stock levels for signs of obsolescence or cash flow blockage.
• Observe any capital injections or profitability improvements in upcoming accounts.
• Track cash balances and current liabilities quarterly to detect liquidity deterioration or improvement.
• Assess management commentary for strategic plans addressing financial deficits.