Company Number: 12847809

Analysis Date: 2025-07-20 12:32 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Davenport 365 Ltd demonstrates a stable balance sheet with positive net assets and net current assets, indicating capacity to meet short-term obligations. However, there is a notable decline in current assets and net assets from 2023 to 2024, suggesting a weakening liquidity position and potential operational challenges. The company is a micro-entity with minimal employees, which may limit its operational scale and diversification. Given these factors, credit approval is possible but should be conditional on close monitoring of liquidity and cash generation, and possibly supported by personal guarantees or additional collateral.

2. Financial Strength:
   The company’s net assets decreased from £85,908 (2023) to £54,801 (2024), a drop of approximately 36%. Fixed assets are negligible (£952 in 2024), typical for a consultancy firm. The net current assets remain positive at £53,849, indicating working capital adequacy despite a reduction from £83,990 in 2023. Shareholders’ funds mirror net assets, confirming no hidden liabilities. The decline in net assets and current assets signals potential pressure on capital reserves or reduced profitability.

3. Cash Flow Assessment:
   Current liabilities have decreased significantly from £28,115 (2023) to £7,245 (2024), which is positive for short-term liquidity. However, the sharp reduction in current assets (mainly cash or receivables) could indicate tighter cash flow. With only one employee and limited fixed assets, operating costs may be low, but the reduction in working capital strength requires careful scrutiny of cash inflows and outflows. There is no direct cash flow statement, so further investigation into receivables collection and expense management is recommended.

4. Monitoring Points:

• Track quarterly cash flow statements to ensure liquidity remains sufficient to meet short-term liabilities.
• Monitor debtor days and any increase in overdue receivables, which could impair cash flow.
• Watch for any further deterioration in net assets or sudden increases in liabilities.
• Review business performance indicators and client retention to assess revenue stability.
• Evaluate management’s response to declining asset position and their plans for financial recovery or growth.