CURVE CLOSET LIMITED

Executive Summary

Curve Closet Limited is a young, small-scale retail company with limited financial resources and a working capital shortfall, creating liquidity risk. While recent cash improvements and stock buildup suggest growth efforts, the fragile equity and negative net current assets warrant cautious credit exposure with stringent monitoring. Conditional approval is recommended, subject to close oversight of cash flow and inventory management.

CURVE CLOSET LIMITED - Analysis Report

Company Number: 14162514

Analysis Date: 2025-07-29 18:59 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Curve Closet Limited is a very young private limited company incorporated in June 2022 with limited financial history and modest scale of operations. The company operates in retail sales via internet/mail order (SIC 47910). The financials show a small net asset base (£74) and negative net current assets (£695) as of June 2024, indicating a working capital deficiency. However, the company has improved stock levels substantially from £1,600 to £7,950, which may suggest preparation for growth or increased sales activity. Directors are insiders holding significant control, which may support continuity but also implies concentrated risk. Given the very early stage and tight liquidity, credit should be extended cautiously and likely supported by personal guarantees or other security. Adequate monitoring of cash flow and stock turnover is essential.

2. Financial Strength:
   The balance sheet reflects low fixed assets (£1,025) and current assets of £10,028 mainly driven by stock (£7,950) and cash (£2,078). Debtors have dropped to zero, which reduces credit risk from receivables but also indicates a possible change in sales terms or customer base. Current liabilities stand at £10,723, up from £5,136 the previous year, causing negative net current assets and signaling short-term liquidity constraints. Shareholders’ funds have decreased from £206 to £74, primarily due to a deferred tax liability of £256 introduced in FY 2024. Overall, the company is undercapitalized with a fragile equity base and insufficient working capital to comfortably cover short-term obligations.

3. Cash Flow Assessment:
   Cash at bank has improved to £2,078 from £884, indicating some positive cash generation or financing. However, negative net current assets and increased short-term creditors (£10,723) highlight liquidity risk. Stock levels have increased significantly, potentially tying up cash and increasing risk of obsolescence. The absence of trade debtors may improve cash collection but also implies the company might be operating on cash sales or prepayments. The small scale and limited employee base (average 1 employee) reduce overhead outgoings but the company must maintain tight control over cash conversion cycle to avoid liquidity shortfalls.

4. Monitoring Points:

• Working capital position and ability to reduce negative net current assets
• Stock turnover and inventory management to prevent cash flow strain
• Cash flow trends and ability to meet creditor payments on time
• Profitability trends and reserves movements in future accounts filings
• Directors’ ongoing commitment and any changes in ownership/control
• Timely filing of returns and accounts to maintain regulatory compliance