FIRST BARBER WATERLOO EK LTD

Executive Summary

FIRST BARBER WATERLOO EK LTD has experienced significant financial deterioration over the latest year, moving from positive net assets to net liabilities and showing liquidity strain. The increase in long-term liabilities and negative working capital raise concerns over its ability to meet debt obligations. Credit approval is not recommended at this stage without further evidence of financial improvement or additional security.

FIRST BARBER WATERLOO EK LTD - Analysis Report

Company Number: 12903986

Analysis Date: 2025-07-29 12:27 UTC

1. Credit Opinion: DECLINE
   FIRST BARBER WATERLOO EK LTD shows a deteriorating financial position with net liabilities of £29,857 as at 30 September 2024, down from net assets of £8,585 the previous year. The company’s balance sheet has weakened significantly due to an increase in long-term creditors (from £16,586 to £50,586) which indicates rising debt obligations. Negative net current assets (-£2,467) suggest liquidity strain. This financial profile raises concerns about the company’s ability to service new or existing credit facilities without additional capital injection or operational improvement.

2. Financial Strength:
   The company is classified as a micro entity, employing only 3 staff, and operating in the hairdressing sector (SIC 96020). Fixed assets are minimal (£23,196) and have slightly decreased. Current assets increased (£40,193) but are insufficient to cover current liabilities (£42,660), resulting in negative working capital. The significant rise in creditors due after more than one year to £50,586 indicates increased long-term liabilities, likely loans or trade payables extending beyond one year, creating a leveraged position. Shareholders’ funds have moved from positive to negative, reflecting accumulated losses and erosion of equity.

3. Cash Flow Assessment:
   Negative net current assets imply potential liquidity issues. Although current assets have improved, the increase in current liabilities and substantial long-term liabilities raise concerns about the company’s ability to meet short-term obligations. There is no detailed cash flow statement, but given the balance sheet trends, cash flow from operating activities may be under pressure. The company’s small size and limited asset base reduce financial flexibility. Continuous monitoring of trade receivables collection and creditor payment terms is necessary.

4. Monitoring Points:

• Monitor quarterly or interim financial updates for signs of improved profitability or cash flow.
• Watch for changes in creditor terms and any renegotiations of long-term debt.
• Assess management’s plans for recapitalisation or operational restructuring.
• Track payment behavior and any overdue supplier or lender payments.
• Monitor any changes in directors or major shareholders that may impact governance or financial strategy.