EMSAREBSTU LTD

Executive Summary

Emsarebstu Ltd exhibits a weak financial position with negative net assets and poor liquidity, underpinned by director loans and minimal cash reserves. The company currently lacks operational cash flows and is highly leveraged, raising significant concerns about its ability to service debt and sustain credit facilities. Without clear evidence of recovery or capital support, extending credit would be risky.

EMSAREBSTU LTD - Analysis Report

Company Number: 13629930

Analysis Date: 2025-07-29 18:01 UTC

1. Credit Opinion: DECLINE
   Emsarebstu Ltd presents a weak credit profile characterized by persistent negative net assets and shareholders' funds, reflecting accumulated losses exceeding £25,000. The company’s liquidity is severely constrained with cash balances of only £1,710 against current liabilities of £68,601, resulting in a significant net current liability position of approximately £66,891. Furthermore, the company is heavily leveraged with long-term debt of £123,725. The director’s loans form a large portion of current liabilities but are repayable on demand, posing repayment uncertainty. The absence of turnover and employees, as well as no income statement filed, indicates minimal or no trading activity and limited cash generation capacity. Given these factors, the company’s ability to meet ongoing debt obligations and service new credit is highly doubtful without substantial capital injection or operational turnaround.

2. Financial Strength:
   The balance sheet shows a stable tangible fixed asset value of £165,500 in land and buildings with no depreciation charged, which supports some underlying asset value. However, this is overshadowed by the cumulative losses reflected in retained earnings and shareholders deficit of over £25,000. The negative net assets position signals insolvency from an accounting perspective. Current liabilities have increased, largely due to director loans, which increases financial risk as these are repayable on demand. The capital structure is fragile, reliant on director advances rather than external or operational cash flow, and the company shows no equity cushion to absorb further losses.

3. Cash Flow Assessment:
   Cash at bank is very low (£1,710), increasing only marginally from the prior year, while current liabilities remain significant and largely unchanged. The company’s working capital position is negative and deteriorating, indicating poor short-term liquidity and potential cash flow stress. The absence of reported turnover or operating cash inflows is a critical concern. Reliance on director loans to fund operations without interest suggests limited external financing options and potential difficulties in generating operating cash flow. There is a high risk of liquidity shortfalls impacting the company’s ability to meet short-term obligations.

4. Monitoring Points:

• Track improvements in cash flow generation and turnover to assess operational recovery.
• Monitor any capital injections from shareholders or directors to bolster equity and liquidity.
• Watch for changes in director loan balances and repayment terms, given these are significant liabilities.
• Keep an eye on any asset disposals or revaluations of the £165,500 land and buildings to improve net asset position.
• Review any filings that disclose income or profit and loss figures to gauge business viability.
• Monitor compliance with filing deadlines to avoid regulatory risks.