FLAT FOUR PERFORMANCE LTD

Executive Summary

Flat Four Performance Ltd is experiencing financial difficulties marked by losses, negative net assets, and poor liquidity. The company’s ability to service debt is currently inadequate, with negative working capital and limited cash reserves. Without significant operational improvements or capital support, extending credit is not recommended at this stage.

FLAT FOUR PERFORMANCE LTD - Analysis Report

Company Number: 13501730

Analysis Date: 2025-07-20 11:24 UTC

1. Credit Opinion: DECLINE
   Flat Four Performance Ltd exhibits significant financial distress and limited ability to meet its debt obligations. The company reported a loss of £5,443 in the latest financial year with net liabilities of £5,288, deteriorating from positive equity in prior years. Current liabilities exceed current assets by £7,074, indicating poor short-term liquidity and negative working capital. Without stronger cash flow generation or capital injection, the company’s repayment capacity is highly questionable. The steep increase in administrative expenses and loss reversal after a prior profit raise concerns about management’s cost control and operational efficiency. Overall, the financial risk is elevated and the company is currently not creditworthy for lending without substantial mitigation.

2. Financial Strength:
   The balance sheet reveals weakening financial health. Fixed assets have been written down from £3,808 to £1,786, and net assets moved from a modest positive £155 to a negative £5,288. The shareholder deficit reflects accumulated losses and eroded equity base, undermining financial stability and creditor protection. Current liabilities have more than doubled to £8,170, while current assets remain minimal at £1,096. The company’s capital structure is fragile with only £100 in share capital and no apparent external financing. Overall, the balance sheet position shows vulnerability to financial stress and limited buffer to absorb shocks.

3. Cash Flow Assessment:
   The company’s cash position is very limited, holding only £103 in cash. Debtors total £993 but the realization timeline and quality are unclear, which may delay cash inflows. Negative net current assets of £7,074 highlight liquidity constraints and potential difficulties meeting short-term obligations as they fall due. Operating losses and increasing administrative costs exacerbate cash flow strain. The absence of significant cash reserves or working capital cushions signals weak liquidity and raises credit risk.

4. Monitoring Points:

• Track monthly cash flow statements closely to assess liquidity trends and timing of debtor collections.
• Monitor operational expenses for any further escalation or control improvements.
• Review debtor aging reports to evaluate collection effectiveness and credit risk exposure.
• Watch for any capital injections, new financing arrangements, or restructuring plans from management.
• Assess turnover growth and profitability improvements in subsequent periods for signs of business recovery.