Company Number: 13243411

Analysis Date: 2025-07-20 17:37 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Diya N Ltd is a relatively young private limited company operating in the retail food sector (specialised bakery and confectionery sales). The company maintains active status with no overdue filings and no liquidation proceedings. However, its financial profile shows persistent working capital deficits and current liabilities close to or exceeding current assets, indicating liquidity pressures. The net assets remain positive but modest at around £74k. Given these factors, credit approval should be conditional on regular monitoring of liquidity and working capital improvements to ensure continued debt servicing capability.

2. Financial Strength
   The balance sheet shows stable net asset value (£73,695 as of 31 March 2024), with fixed assets representing the majority of total assets (£217,724) and a modest amount of stock (£17,500). However, the company consistently reports a negative net current asset position (working capital deficit of £102,757), reflecting that current liabilities (£163,550) exceed current assets (£60,793). The company has a relatively low share capital (£100) and accumulated reserves of about £73,595. Deferred tax liabilities amount to £41,272, which impacts net assets but relates to timing differences. Overall, the company’s balance sheet indicates moderate financial stability but restricted short-term liquidity.

3. Cash Flow Assessment
   Cash balances have decreased from £60,418 in 2023 to £43,261 in 2024, suggesting cash consumption during the year. Current liabilities have reduced from £200,645 to £163,550, but remain high relative to current assets, leading to ongoing negative working capital. The company’s ability to convert stock and debtors into cash promptly is critical; however, debtor balances are negligible (£32), indicating limited receivables risk. The negative working capital position suggests potential cash flow strain to meet short-term obligations without external financing or improved operating cash flow.

4. Monitoring Points

• Working capital trends: Watch for reduction in negative net current assets and improvement in liquidity ratios.
• Cash balances and cash flow from operations: Ensure sufficient cash generation to cover short-term liabilities.
• Current liabilities composition: Monitor any increases in trade creditors or other short-term debts that could pressure liquidity.
• Profitability and retained earnings: Track if the company generates sufficient profits to build reserves over time.
• Management actions: Review any restructuring, refinancing, or capital injections that improve financial resilience.