Company Number: 13993134

Analysis Date: 2025-07-20 16:46 UTC

1. Credit Opinion: APPROVE with conditions
   Dragony Services Ltd is a micro private limited company with a short but stable trading history since incorporation in 2022. The company shows a positive net asset position and growing working capital, indicating a sound financial footing. However, the director has a significant advance loan to the company (£63.5k) with no fixed repayment terms or interest, which introduces some uncertainty in cash flow reliability. Approval is recommended with monitoring of the director’s advances and repayments to ensure no erosion of liquidity that could impair debt servicing.

2. Financial Strength:
   The company’s net assets have increased from £40.5k in 2023 to £60.5k in 2024, demonstrating growth and retention of earnings or capital. Fixed assets are minimal (£2.2k), so the balance sheet strength mainly derives from current assets exceeding current liabilities by £58.3k, reflecting good short-term financial health. There are no long-term liabilities or provisions reported, which reduces financial risk. The sole shareholder/director controls 75-100% of shares, indicating clear ownership and decision-making authority.

3. Cash Flow Assessment:
   Current assets of £90.7k against current liabilities of £32.3k provide a healthy current ratio (~2.8x), suggesting ample liquidity to meet short-term obligations. However, the director’s advance loan to the company (£63.5k) is a notable related party transaction that affects working capital perception. Since no interest or fixed repayment schedule exists, this could constrain cash availability if the director’s loan is not repaid or converted. Regular scrutiny of cash flows and related party balances is advised.

4. Monitoring Points:

• Track changes in director advance balances and repayment patterns to avoid liquidity strain.
• Monitor profitability and retained earnings growth to sustain net asset improvements.
• Watch for any increase in liabilities or contingent commitments that could impact solvency.
• Ensure timely filing of accounts and confirmation statements to maintain compliance and transparency.
• Observe any changes in business activity or industry risks given the consultancy nature (SIC: 71122, 62020).