DAFFODIL ASSETS LIMITED

Executive Summary

Daffodil Assets Limited is currently in a weak financial position with negative net assets and severe working capital deficits, raising concerns about its ability to meet debt obligations. The company’s liquidity is critically low, and financial deterioration over the last year suggests heightened credit risk. Credit extension is not recommended without significant improvements in capital structure and cash flow.

DAFFODIL ASSETS LIMITED - Analysis Report

Company Number: 13238402

Analysis Date: 2025-07-29 17:14 UTC

1. Credit Opinion: DECLINE
   Daffodil Assets Limited shows significant financial distress with net current liabilities exceeding current assets by over £2.2 million and an overall net liability position as of the latest accounts. The sharp deterioration from a positive net asset position in 2022 to negative in 2023 signals worsening financial health. The company's ability to service any additional debt or commercial credit is highly questionable given the large creditor balances and minimal liquidity. Without evidence of improving cash flows or capital injection, extending credit poses a high risk.

2. Financial Strength:
   The balance sheet reveals a substantial decline in fixed assets from £2.58 million in 2022 to £2.23 million in 2023, possibly due to disposals or impairments, though details are not provided. Current liabilities remain very high, close to £2.28 million, dwarfing current assets of only £1,924. This results in a heavily negative working capital of approximately £2.28 million. The net asset position has swung from a modest positive £78,886 in 2022 to a negative £50,868 in 2023. Shareholders’ funds have been eroded, indicating accumulated losses or write-downs.

3. Cash Flow Assessment:
   The company’s micro-entity accounts suggest very limited liquid assets and working capital. Current assets are almost negligible relative to short-term creditors, implying poor liquidity and an inability to meet short-term obligations without external funding. There is no evidence of operating cash flow generation or reserves to cover liabilities. The company employs only one person, indicating minimal operational scale, which may limit revenue inflows.

4. Monitoring Points:

• Movement in current liabilities and any restructuring or settlements of short-term debts.
• Changes in fixed asset values and any disposals impacting asset base.
• Evidence of capital injections or shareholder loans to restore equity.
• Operating cash flows and liquidity improvements in subsequent periods.
• Director’s plans or strategies to address the financial distress, including potential refinancing or business model changes.