Company Number: 12740823

Analysis Date: 2025-07-20 17:46 UTC

1. Credit Opinion: DECLINE
   Deadly Customs Ltd shows significant deterioration in financial position as of the latest accounts (year ended 31 March 2024). The net assets have turned negative (£-4,886), indicating the company is technically insolvent on a balance sheet basis. Current liabilities have increased sharply to £54,129 from £39,503, while net current assets have moved from positive £8,167 to negative £20,307. The presence of long-term creditors growing from £4,412 to £12,660 further strains financial stability. This suggests weak liquidity and a heightened risk of default on credit obligations. Additionally, the reduction in average employees from 3 to 2 may indicate downsizing or operational challenges. Without evidence of turnaround or external support, the company’s ability to meet debt repayments and commercial commitments is questionable.

2. Financial Strength:
   The balance sheet shows a decline in net assets from a positive £11,959 in 2023 to a deficit of £4,886 in 2024, primarily driven by increased liabilities, both current and long-term. Fixed assets have increased modestly, but this does not offset the sharp rise in creditors. The company’s working capital deteriorated significantly, with net current assets turning negative by over £20k. This reflects poor short-term financial health and suggests potential difficulties in funding daily operations and creditor payments. Shareholders’ funds are now negative, which implies erosion of equity and weak financial resilience.

3. Cash Flow Assessment:
   There is no direct cash flow statement provided, but the worsening net current assets and growing current liabilities indicate stressed liquidity. The company’s inability to maintain positive working capital is a warning signal that it may struggle to convert assets to cash quickly enough to cover immediate obligations. The negative net assets position also suggests potential cash flow shortages. Given the micro-entity status and limited financial data, it is recommended to obtain management accounts or cash flow forecasts to verify liquidity.

4. Monitoring Points:

• Track quarterly management accounts focusing on cash balances and debtor/creditor aging.
• Monitor any restructuring efforts or capital injections that could improve solvency.
• Watch for changes in creditor terms or supplier payment delays as signs of liquidity stress.
• Review director and shareholder actions for evidence of financial support or strategic changes.
• Keep an eye on employee numbers and operational scale as leading indicators of business health.