EVENT SHACK LTD

Executive Summary

Event Shack Ltd is a recently established company with a weak financial position characterized by negative net assets and dependency on director loans. Cash reserves and working capital are limited, constraining liquidity and debt servicing capacity. Credit extension is not recommended without significant improvements in profitability and equity position or additional security.

EVENT SHACK LTD - Analysis Report

Company Number: 14773793

Analysis Date: 2025-07-29 15:54 UTC

1. Credit Opinion: DECLINE
   Event Shack Ltd exhibits a weak financial position with net liabilities and negative shareholders' funds, indicating an equity deficit. The company relies heavily on director loans as long-term liabilities, which raises concerns about financial independence and repayment capacity. The negative net assets and persistent losses suggest insufficient profitability and limited ability to generate internal funds for debt servicing. Given the company’s status as a newly incorporated entity (2023) and absence of positive equity or cash flow cushion, extending credit would be high risk without substantial guarantees or collateral.

2. Financial Strength:
   The balance sheet shows tangible fixed assets of £15,720 against current liabilities of £19,792 and total net liabilities of £816 as at 30 April 2025. Although fixed assets provide some security, the company’s net current assets stand at only £3,256, which is modest relative to short-term obligations. The key concern is the large amount of director loans (£19,792) classified as creditors due after more than one year, reflecting reliance on related-party funding rather than external financing. The company’s negative retained earnings (P&L reserve) confirm accumulated losses since inception, and shareholders' funds remain negative at £816.

3. Cash Flow Assessment:
   Cash at bank is low at £806, indicating limited liquidity to cover immediate expenses or unforeseen cash requirements. Debtors are £2,450, but the overall current assets of £3,256 are insufficient to comfortably cover current liabilities of £19,792, resulting in a tight working capital position. The company is reliant on director loans for funding, which may not be readily available or sustainable long-term. Operating cash flow details are not provided, but the negative equity and losses imply limited internal cash generation capability.

4. Monitoring Points:

• Track profitability trends and whether the company moves towards generating positive retained earnings.
• Monitor liquidity ratios, particularly current ratio and quick ratio, to assess short-term solvency.
• Review director loan balances and repayment arrangements to ensure they do not jeopardize financial stability or creditor priority.
• Watch for compliance with filing deadlines and any adverse changes in company status or director conduct records.