Company Number: SC733099

Analysis Date: 2025-07-29 18:29 UTC

1. Credit Opinion: APPROVE - EM22 LTD demonstrates a solid micro-entity financial profile with increasing shareholder funds and positive working capital. The company’s current asset base significantly exceeds current liabilities, indicating good short-term liquidity. The presence of two directors with apparent stable management and no adverse records further supports creditworthiness. However, as a relatively new and small entity with limited financial history, moderate caution is advised on credit limits.

2. Financial Strength: The balance sheet shows healthy growth with shareholders’ funds doubling from £64.9k in 2023 to £130.4k in 2024, evidencing retained profits or capital injections. Current assets increased by 71% to £164.4k with stable current liabilities around £12.9k, resulting in strong net current assets (~£151.5k) and a positive liquidity position. Provisions for liabilities have increased modestly but remain manageable. The company operates within micro-entity thresholds, reflecting a simple capital structure and low financial leverage.

3. Cash Flow Assessment: Current assets primarily consist of cash and equivalents or receivables, supporting operational liquidity. The net current assets indicate ample working capital to meet short-term obligations comfortably. No overdrafts or short-term borrowings are reported, reducing refinancing risk. The increase in average employees from 1 to 2 suggests scaling operations, which may impact future cash flow requirements but currently appears well managed.

4. Monitoring Points:

• Continued growth in shareholder funds and net current assets to confirm sustained profitability.
• Management of provisions and liabilities to ensure no unexpected obligations arise.
• Cash flow from operations as the company expands employee count and activities.
• Any changes in director appointments or control structure.
• Timely filing of accounts and confirmation statements to avoid compliance risks.