CPM JOINERY & TIMBER PRESERVATION LTD

Executive Summary

CPM Joinery & Timber Preservation Ltd demonstrates a stable financial position with positive net assets and working capital suitable for a micro-entity, though recent slight declines suggest cautious optimism. The company appears capable of meeting short-term obligations, but credit approval should be conditional on ongoing monitoring of liquidity and profitability metrics. Concentration risk due to sole director control and exposure to cyclical construction activities warrant attention.

CPM JOINERY & TIMBER PRESERVATION LTD - Analysis Report

Company Number: SC686629

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

1. Credit Opinion: CONDITIONAL APPROVAL
   CPM Joinery & Timber Preservation Ltd exhibits a stable financial position for a micro-entity with positive net assets and working capital. However, the company shows a slight decline in net current assets and total net assets from 2023 to 2024. The business has been operational since 2021 and is controlled solely by the director, which concentrates risk. The company’s ability to service debt appears adequate if current trends hold, but the modest scale and slight asset decline suggest caution. Approval should be conditional on regular financial monitoring and confirmation of cash flow adequacy.

2. Financial Strength
   The balance sheet reflects total net assets of £11,717 as of 31 March 2024, up from £10,561 in 2023, indicating a modest increase in equity. Fixed assets increased from £14,817 to £17,729, demonstrating some investment in long-term resources. Current assets decreased slightly from £20,660 to £18,442 while current liabilities fell from £9,083 to £10,668 (note that the 2023 current liabilities figure appears inconsistent—see next point). Creditors due after more than one year reduced from £15,833 to £13,786, improving long-term liability exposure. Overall, the company maintains positive net current assets of £7,774, reflecting sufficient short-term asset coverage over liabilities. The shareholders’ funds show a stable equity base for a micro business.

3. Cash Flow Assessment
   Net current assets (working capital) decreased from £11,577 to £7,774 year-on-year, indicating a reduction in liquidity buffer but remaining positive. Current liabilities appear to have increased slightly (£10,668 in 2024 vs. £9,083 in 2023 from the note), which could pressure short-term cash resources. The company employs 5 staff consistently, suggesting steady operating costs. Without detailed profit and loss or cash flow statements, the liquidity assessment is limited but the positive net current assets imply the company can meet short-term obligations. Monitoring cash conversion cycles and debtor days will be important.

4. Monitoring Points

• Continued tracking of net current assets and liquidity trends to ensure working capital remains positive.
• Monitoring of creditor balances, especially amounts falling due within one year, to avoid liquidity strain.
• Assessment of profitability and cash generation in future accounts filings to confirm debt servicing capacity.
• Watch for any changes in director or ownership structure given concentration risk.
• Industry sector risks in construction and joinery, which can be cyclical, should be considered.