DARKROOM DOOR LIMITED

Executive Summary

Darkroom Door Limited is currently financially weak with negative net assets and a working capital deficit, signaling poor liquidity and limited capacity to service debt. The company’s financial trajectory is negative, and given its micro scale and single director control, credit risk is elevated. Without evidence of improved financial performance or capital support, credit facilities should be declined or require strong conditions and close monitoring.

DARKROOM DOOR LIMITED - Analysis Report

Company Number: 13547163

Analysis Date: 2025-07-20 17:27 UTC

1. Credit Opinion: DECLINE
   Darkroom Door Limited exhibits negative net assets of £7,708 as of the latest financial year ending August 2024, indicating a balance sheet deficit. The company’s current liabilities (£16,943) exceed current assets (£9,235), resulting in a negative working capital position of -£7,708. This weak liquidity position signals difficulty in meeting short-term obligations. Additionally, the company’s net assets have deteriorated from a modest positive £1 in prior years to a significant deficit, reflecting a worsening financial position. The company is a micro-entity with minimal scale and a single employee (the director), limiting operational resilience. Without further financial detail (profit & loss) and given the balance sheet weakness, the risk of default on credit facilities is elevated. Therefore, credit approval is not recommended at this stage.

2. Financial Strength:
   The balance sheet shows a decline from a break-even net asset position to a net liability status within two years, highlighting a troubling erosion of equity. Current liabilities exceed current assets by approximately 83%, which suggests ongoing liquidity stress. There is no indication of fixed assets or capital investments, and the company relies solely on its director’s equity injection or short-term funding. The lack of profitability data impairs full assessment but the negative net assets and working capital deficit are significant red flags. The company’s small scale and single director control concentration increase risk.

3. Cash Flow Assessment:
   The negative net working capital suggests the company may be relying on creditor funding or short-term loans to finance operations. Without positive net current assets, the company is unlikely to have sufficient cash flow for debt servicing or supplier payments from operating activities alone. The absence of detailed cash flow statements limits deeper analysis but the financial position implies constrained liquidity and potential cash flow difficulties. External financing or capital injections may be necessary to maintain operations.

4. Monitoring Points:

• Monitor future filings for signs of improved net assets or working capital.
• Watch for any director loans or capital injections disclosed.
• Track payment history with suppliers to detect potential defaults or delays.
• Review any changes in business plan or product offerings that could impact cash flow positively.
• Keep abreast of filing compliance and any director changes or disqualifications.