Company Number: 12449213

Analysis Date: 2025-07-20 15:48 UTC

1. Credit Opinion: CONDITIONAL APPROVAL DATENWERK LTD is a micro-entity IT consultancy with modest turnover and limited operational scale. The company shows stable working capital but has experienced a decline in net assets and current asset coverage over the last year. The director is the sole significant controller with consistent management presence since incorporation. However, the reduction in net assets from £11,529 (2023) to £7,165 (2024) and increased current liabilities from £2,006 to £5,000 warrant caution. The company appears able to service small-scale credit facilities, provided limits and terms reflect its size and current financial position. Close monitoring is recommended.

2. Financial Strength: The balance sheet is modest but solvent. Fixed assets are negligible (£165), indicating minimal capital investment or reliance on tangible assets. Current assets slightly increased to £17,000, predominantly cash or receivables, while current liabilities more than doubled to £5,000, reducing net current assets to £12,000. The drop in net assets from £11,529 to £7,165 suggests a decline in retained earnings or shareholder funds, potentially due to reduced profitability or drawings by the sole director. Share capital remains nominal at £1. Overall, the financial position is weak but not critical, consistent with a small single-person consultancy.

3. Cash Flow Assessment: Working capital is positive at £12,000, indicating sufficient short-term liquidity to cover immediate liabilities. The increase in current liabilities is notable but still covered by current assets with a comfortable ratio above 3:1. The company employs only one person (the director), limiting payroll obligations. Absence of off-balance sheet liabilities is positive. However, the year-on-year decline in net assets may reflect cash outflows exceeding inflows, suggesting tighter cash flow management is needed. Cash flow projections and tighter credit terms should be reviewed before extending credit.

4. Monitoring Points:

• Track net asset and working capital trends quarterly to detect further erosion.
• Monitor accounts receivable aging and debtor collection efficiency.
• Review turnover and profitability trends annually to confirm business viability.
• Watch for any director withdrawals or drawings impacting equity.
• Ensure timely filing of accounts and confirmation statements to avoid regulatory risk.
• Assess any changes in current liabilities composition or increases signaling liquidity pressure.