Company Number: 12946402

Analysis Date: 2025-07-20 17:09 UTC

1. Credit Opinion: CONDITIONAL APPROVAL EQUA DESIGN LTD shows a mixed financial position with a recent positive turnaround in net current assets but also a significant increase in long-term liabilities. The company has no history of insolvency or director disqualification and maintains compliance with filing deadlines, reflecting good governance. However, the sharp rise in creditors falling due after one year (£175,865 in 2023) raises concerns about long-term debt servicing capacity and financial resilience. Approval is recommended with conditions: close monitoring of debt servicing ability, cash flow, and creditor relations.

2. Financial Strength: The balance sheet shows significant volatility over the last two years. In 2022, the company had negative net assets (-£4,814), but by 2023 net assets improved to £10,361. Current assets increased substantially to £189,234, improving liquidity, and net current assets are positive at £186,226. Nevertheless, the company has taken on long-term creditors of £175,865, which is a material obligation relative to equity. Shareholders’ funds remain minimal (£10,361) with a nominal share capital of £1. The financial structure suggests the company is leveraging debt to support operations or growth but has limited equity buffer.

3. Cash Flow Assessment: The current assets to current liabilities ratio is strong in 2023, indicating sufficient short-term liquidity to cover immediate obligations. The company had only 1 average employee in the last reported year, suggesting low fixed overheads. However, the sizeable long-term creditors could pressure cash flows in future periods. Without full profit and loss data, it’s unclear if operating cash flows can sustain debt service. Overall, there is reasonable short-term liquidity but potential medium-term cash flow risk.

4. Monitoring Points:

• Regular review of debt maturity profile and repayment schedules.
• Monitoring cash flow statements when available to ensure operating cash flows are sufficient to meet liabilities.
• Watch for any deterioration in net current assets or increase in overdue payables.
• Track profitability trends and any changes in working capital management.
• Observe any changes in director or ownership structure that may impact governance.