Company Number: OC443244

Analysis Date: 2025-07-20 14:11 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Dron & Wright LLP is a recently formed limited liability partnership with accounts filed up to March 2024. The firm demonstrates a positive net asset position and healthy working capital, indicating an ability to meet short-term obligations. However, the sharp decline in current assets and net assets from 2023 to 2024 and a reduction in headcount from 7 to 2 employees suggest operational scaling back or restructuring that warrants caution. Credit approval is recommended subject to monitoring of ongoing financial stability and business activity.

2. Financial Strength:

• Net Assets have decreased significantly from £447,659 in 2023 to £140,253 in 2024, a reduction of approximately 69%.
• Current assets fell from £659,929 to £148,668, driven largely by a drop in debtors (£365,192 to £9,596) and cash balances (£284,737 to £139,072).
• Current liabilities also decreased from £218,050 to £8,415, improving net current assets proportionally.
• The firm has no tangible fixed assets as of 2024, indicating minimal investment in long-term assets.
• Overall, the balance sheet remains positive with net current assets exceeding current liabilities by a significant margin, but the decline in scale may impact future earning capacity.

3. Cash Flow Assessment:

• Cash holdings of £139,072 at year-end provide liquidity buffer for operations.
• Working capital is strong at £140,253, indicating comfortable coverage of short-term liabilities.
• The reduction in debtors and creditors suggests a contraction in business volume or improved collection/payment efficiency.
• Absence of fixed assets and lower employee numbers may reduce cash outflows but also impact revenue generation.
• No indication of overdrafts or short-term borrowing, which supports liquidity confidence.

4. Monitoring Points:

• Track monthly cash flow and debtor days to ensure continued liquidity and timely collections.
• Monitor trade creditor balances and payment practices to avoid supplier distress.
• Observe any further changes in employee numbers or operational scale that could affect revenue.
• Review future accounts for recovery or further decline in net assets and turnover.
• Assess management commentary or market conditions affecting the firm’s sector to anticipate risks.