CROSSFIRE MEDIA AND MARKETING LTD

Executive Summary

Crossfire Media and Marketing Ltd shows a fragile financial position characterized by poor working capital and significant short-term liabilities exceeding current assets. However, improved cash balances and positive shareholders’ funds provide some support. Credit may be extended on a conditional basis with stringent monitoring of liquidity and cash flow metrics to mitigate repayment risk.

CROSSFIRE MEDIA AND MARKETING LTD - Analysis Report

Company Number: 12791426

Analysis Date: 2025-07-20 15:18 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Crossfire Media and Marketing Ltd is an active private limited company in the advertising agency sector with relatively small scale operations. The company has a very weak liquidity position as evidenced by significant net current liabilities of £71,286 for the latest year, increasing from £22,640 the prior year. This reflects an inability to cover short-term debts with current assets, raising concerns about short-term repayment capability. However, the company’s shareholders’ funds have improved slightly to £6,898. The company carries bank loans and overdrafts of £53,997, indicating reliance on external borrowing. Given the weak working capital position but positive equity and ongoing trading status, credit approval can be considered but only with conditions such as limits on additional borrowing, monitoring of cash flow, and possibly securing guarantees or collateral.

2. Financial Strength:
   The company has tangible fixed assets valued at £78,184 (net of depreciation), which is an increase from prior years, suggesting some investment in long-term assets. However, fixed assets are illiquid and cannot be relied upon to meet immediate liabilities. The equity base is very modest at £6,898, reflecting the company’s small size and limited capital buffer. The balance sheet shows a worsening current ratio, driven by rising short-term liabilities (£97,683). There is no indication of large retained profits or reserves, and the company's share capital is nominal (£1.00). Overall, the financial strength is weak with poor liquidity but some asset backing.

3. Cash Flow Assessment:
   Cash on hand improved markedly to £24,896 from £4,359 the previous year, which is a positive sign for immediate liquidity. However, this cash balance is still insufficient against current liabilities nearly four times larger. The debtor balance remains negligible (£1), indicating no significant receivables to convert to cash soon. Significant bank overdrafts and loans suggest the company is utilizing external financing to support operations. The negative net current assets highlight a working capital deficiency that could impair the ability to meet short-term obligations without additional funding or improved cash conversion cycles.

4. Monitoring Points:

• Continuous monitoring of cash flow and liquidity ratios, especially current ratio and quick ratio.
• Watch for any increases in current liabilities or overdue creditor payments.
• Track profitability and retained earnings development to assess internal capital generation.
• Monitor any changes in bank loan terms or overdraft facilities that could impact liquidity.
• Observe management actions to reduce working capital deficits, such as improving collections or controlling payables.
• Review for any director or ownership changes that may affect governance or financial stewardship.