Company Number: 12443998

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

1. Credit Opinion: CONDITIONAL APPROVAL
   Day & Dunn Ltd demonstrates modest but improving financial health with positive net assets and working capital. The company operates in architectural activities, a sector that can be cyclical but with manageable risk if cash flow is maintained. However, the relatively low net asset base (£6,786) and modest fixed assets suggest limited collateral for secured lending. The company’s ability to service its debt looks adequate given positive net current assets and cash balances, but the presence of long-term borrowings (£18,588) warrants monitoring. Approval is recommended with conditions relating to ongoing cash flow monitoring and updated financials.

2. Financial Strength:
   The balance sheet at 29 February 2024 shows net assets of £6,786, an increase from £278 the prior year, reflecting retained earnings growth. Fixed assets have decreased to £1,592 from £4,182, indicating possible asset disposals or depreciation outpacing additions. Current assets (£78,685) exceed current liabilities (£54,903), yielding net current assets of £23,782, which is positive and supports short-term liquidity. Long-term liabilities have reduced from £25,190 to £18,588, improving gearing slightly but still representing a significant obligation relative to equity.

3. Cash Flow Assessment:
   Cash at bank (£68,408) forms the major component of current assets, providing good liquidity. Debtors at £10,277 are stable compared to previous years, indicating consistent collections. The reduction in current liabilities from £61,906 to £54,903 supports improving short-term creditor management. The company has managed to maintain positive working capital and reduce long-term debt commitments, which suggests prudent cash flow management. However, ongoing attention to cash flow forecasting is advised to ensure timely servicing of debt and operational expenses.

4. Monitoring Points:

• Watch cash flow trends closely, especially in relation to working capital and debt servicing capacity.
• Monitor debt levels and refinancing risk given the outstanding long-term borrowings.
• Track profitability metrics and retained earnings growth to build equity buffer.
• Observe debtor days and creditor payment terms to prevent liquidity strain.
• Review any changes in directors or significant control that could impact management stability.