EJM PERFORMING ARTS LLP

Executive Summary

EJM Performing Arts LLP maintains a positive balance sheet with net current assets and no external debt, reflecting a financially stable micro-entity. However, limited financial history and lack of detailed income data introduce risk regarding cash flow sufficiency to service liabilities. Conditional credit approval is advised, pending further evidence of consistent revenue generation and liquidity management.

EJM PERFORMING ARTS LLP - Analysis Report

Company Number: OC438905

Analysis Date: 2025-07-19 11:52 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   EJM Performing Arts LLP is a small, active limited liability partnership incorporated in 2021 with no overdue filings and up-to-date statutory compliance. The company shows a positive working capital position and net assets, indicating a sound balance sheet for its size. However, the business is relatively young with limited financial history and no reported turnover figures in the extracted data, which introduces some uncertainty regarding its revenue generation and debt servicing ability. Approval is recommended on a conditional basis, subject to obtaining further evidence of stable cash flows or confirmed income streams to support repayment capacity.

2. Financial Strength:
   The LLP’s balance sheet as of 31 March 2024 shows total current assets of £14,326, consisting mainly of debtors (£12,547) and cash (£1,779). Current liabilities stand at £5,676, yielding net current assets (working capital) of £8,650, a positive sign for short-term liquidity. Fixed assets net of depreciation are £1,639, supporting a total net asset position of £10,289. The net assets are entirely represented by amounts owed to members, indicating that equity is in the form of members’ loans rather than external capital. The absence of external debt reduces risk but also limits leverage possibilities. Overall, the financial position shows modest but stable capital structure for a micro/small entity.

3. Cash Flow Assessment:
   Cash at bank is low at £1,779, which is typical for a small LLP, but the significant debtor balance (£12,547) is a positive sign of receivables that could convert to cash. The current liabilities are moderate and manageable given the working capital buffer. The company does not report employees, suggesting low fixed overhead costs, which supports cash conservation. However, no income statement or turnover figures are disclosed, so cash flow sustainability and operating profitability cannot be fully assessed. Monitoring the conversion of debtors to cash and overall liquidity will be crucial.

4. Monitoring Points:

• Confirm actual and recurring revenue streams to verify consistent cash inflows sufficient to cover liabilities and members’ loans.
• Monitor debtor aging and collection efficiency to ensure receivables do not become impaired.
• Track cash balances and short-term liquidity monthly to identify any emerging cash flow stress.
• Review any changes in members’ loans or capital contributions that affect financial stability.
• Watch for director/member changes and any related impact on governance or business direction.