DESIRED BAR & LOUNGE LIMITED

Executive Summary

Desired Bar & Lounge Limited is currently financially distressed with negative net assets and persistent liquidity shortfalls. The company’s balance sheet weaknesses and ongoing negative working capital indicate limited ability to service debt or sustain operations without external support. Credit facilities are not recommended until there is clear evidence of financial stabilization or restructuring.

DESIRED BAR & LOUNGE LIMITED - Analysis Report

Company Number: 12835680

Analysis Date: 2025-07-20 16:29 UTC

1. Credit Opinion: DECLINE
   Desired Bar & Lounge Limited exhibits significant financial distress and an inability to meet short-term obligations. Persistent net current liabilities and a substantial negative net asset position indicate poor capital structure and high leverage. The company’s financial trajectory is negative, with net liabilities worsening from -£74,924 in 2023 to -£99,935 in 2024. Given these factors, the risk of default is elevated, and the company lacks sufficient financial resilience to withstand unexpected downturns. Without evidence of capital injection or turnaround strategy, credit facilities would be unadvisable at this stage.

2. Financial Strength:
   The balance sheet shows fixed assets of approximately £32.7k and current assets of only £10.1k against current liabilities of £13.5k, resulting in negative net current assets of -£3.4k. More concerning is the long-term creditor position of £129.2k, driving total net liabilities to nearly £100k. Shareholders’ funds are deeply negative, implying accumulated losses and insufficient equity buffer. This indicates weak solvency and an overreliance on debt financing.

3. Cash Flow Assessment:
   The company’s working capital position is negative and deteriorated from the prior year, suggesting ongoing liquidity strain. Current assets barely cover short-term liabilities, and the negative net current assets imply potential cash flow challenges in meeting immediate obligations such as supplier payments and wages. The limited number of employees (average of 3) and micro-entity scale may limit operational flexibility but does not compensate for the liquidity deficit.

4. Monitoring Points:

• Monitor changes in net current assets and overall liquidity position each reporting period.
• Track creditor repayment patterns and any renegotiation of long-term debt terms.
• Watch for capital injections or equity restructuring that may improve solvency.
• Assess management’s strategy and any operational improvements aimed at profitability and cash flow enhancement.
• Review compliance with filing deadlines and any indications of financial distress such as administration or liquidation filings.