CREATOR WORKS LTD

Executive Summary

CREATOR WORKS LTD shows adequate financial strength with positive net assets and working capital but has experienced a significant decline in cash and reserves over the last year. The company’s ability to service debt remains intact, although liquidity pressures warrant close monitoring. Conditional credit approval is recommended, emphasizing cash flow oversight and operational discipline.

CREATOR WORKS LTD - Analysis Report

Company Number: SC684290

Analysis Date: 2025-07-29 20:58 UTC

1. Credit Opinion:
   CONDITIONAL APPROVAL. CREATOR WORKS LTD demonstrates a positive net asset position and working capital, suggesting an ability to meet short-term liabilities. However, there is a notable decline in cash and net current assets from 2023 to 2024, indicating some liquidity pressure. The single director and sole owner model centralizes control but may present key person risk. Approval is recommended with monitoring conditions on liquidity and cash flow management.

2. Financial Strength:
   The company’s net assets have decreased from £45,082 in 2023 to £19,915 in 2024, a significant reduction of over 55%. This drop is primarily driven by reduced current assets, especially cash, which fell from £50,800 to £19,898. Tangible fixed assets are minimal (£453) relative to liabilities. Shareholders’ funds now stand at £19,915, reflecting retained earnings decline but remain positive. The balance sheet remains solvent, but the trend suggests weakening financial resilience.

3. Cash Flow Assessment:
   Current liabilities have decreased from £18,243 to £10,452, which partly offsets the impact of declining current assets. Net current assets remain positive at £19,462, indicating working capital adequacy for short-term obligations. However, cash on hand has declined sharply, which can constrain operational flexibility. Debtors are stable but slightly reduced, implying consistent revenue collection. Cash flow should be closely monitored to ensure continued ability to service liabilities without strain.

4. Monitoring Points:

• Liquidity trends: Watch quarterly cash balances and net current assets to ensure no further erosion.
• Profitability and cash generation: Review management accounts for profitability trends and cash conversion efficiency.
• Director reliance: Monitor any changes in ownership or management to mitigate key person risk.
• Debtor ageing: Ensure timely collection to support working capital.
• Cost control: Scrutinize overheads and tax/social security liabilities as they remain a significant part of current liabilities.