EASTWOOD FINANCE LTD

Executive Summary

Eastwood Finance Ltd shows promising growth in net assets and liquidity within its first two years, supported by director funding and improving cash reserves. While the company demonstrates adequate short-term financial health and management support, conditional credit approval is advised with close monitoring of related party loans, tax liabilities, and receivables to mitigate liquidity risk. Continued operational performance and timely filings will be key to sustaining creditworthiness.

EASTWOOD FINANCE LTD - Analysis Report

Company Number: 13918034

Analysis Date: 2025-07-29 20:43 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Eastwood Finance Ltd demonstrates improving financial strength and liquidity, but as a recently incorporated company (2022), its financial track record is limited. The company shows a significant increase in net assets and working capital in the latest year, supported by director loans. While this indicates some reliance on insider funding, it also reveals ongoing support from management. Approval is recommended with conditions, including ongoing monitoring of cash flow and receivables collection to ensure the business can maintain operational liquidity without additional director advances.

2. Financial Strength:
   The balance sheet shows net assets growing from £637 at incorporation to £8,444 as of 29 February 2024. Fixed assets are modest (£1,910), consistent with the company’s nature as a financial services holding entity (SIC 64205). Current assets increased substantially to £21,210, comprising £11,379 cash and £9,831 debtors. Current liabilities rose to £14,198, mainly taxation and social security liabilities (£13,718), which could reflect accrued payroll taxes or VAT. The company holds positive net current assets (£7,012), indicating good short-term financial stability. The equity base is primarily retained earnings (£8,443), reflecting accumulated profits or internal financing.

3. Cash Flow Assessment:
   Cash at bank improved markedly from £1,006 to £11,379, reflecting better liquidity. Debtors also increased significantly due to large director loans (£9,831), which are unsecured, interest-free, and repayable on demand, representing an asset but also a potential liquidity risk if not repaid timely. The company’s current liabilities are manageable relative to current assets, yielding a healthy current ratio (~1.5x). However, the high taxation and social security creditor balance warrants clarification to confirm these are timing differences rather than overdue obligations. Overall, liquidity appears sufficient for current operations, but cash flow depends on debtor repayment and operational cash generation.

4. Monitoring Points:

• Track director loan balances and repayment schedules to ensure no liquidity strain arises from these related party transactions.
• Monitor tax liabilities to confirm timely settlement and avoid penalties or cash flow disruption.
• Review debtor aging to assess collectability and potential credit risk.
• Watch for continued profitability and positive cash flow trends in subsequent accounts given the short operating history.
• Ensure compliance with filing deadlines and maintain transparent financial reporting.