FOURTEEN AGRINSECT LIMITED

Executive Summary

Fourteen Agrinsect Limited shows a weak financial position characterized by substantial negative net current assets and shareholders’ deficit, with heavy reliance on related party funding. The company’s liquidity position is poor, and current cash resources are insufficient to cover liabilities. Given these factors, the company is not currently creditworthy for external lending without significant mitigation or restructuring.

FOURTEEN AGRINSECT LIMITED - Analysis Report

Company Number: 12777863

Analysis Date: 2025-07-20 19:15 UTC

1. Credit Opinion: DECLINE
   Fourteen Agrinsect Limited presents a concerning credit profile. The company’s financial statements reveal persistent and growing negative net current assets and shareholders’ deficit, indicating an inability to meet short-term liabilities with available current assets. The company’s current liabilities have risen substantially to £970k against current assets of only £27k as of the latest accounts, a severe liquidity mismatch. Moreover, related party borrowings, which form a significant part of the current liabilities (£924k total), expose the reliance on insider funding rather than external commercial debt capacity. Without evidence of improving cash flows or profitability and given the negative equity position, the company currently lacks the financial strength to service external credit reliably.

2. Financial Strength:
   The balance sheet shows a large increase in tangible fixed assets (£851k) funded largely by short-term creditors, notably related parties, creating a significant working capital deficit (£-942k). The company operates with a negative net asset position of £-91k, worsening from prior years, reflecting accumulated losses. The absence of depreciation charges suggests fixed assets may be overvalued or accounting policies need scrutiny. The company’s equity is eroded, with losses retained in reserves and minimal share capital. This weak financial foundation limits the company’s ability to absorb operational or market shocks.

3. Cash Flow Assessment:
   Cash balances decreased slightly to £24k, insufficient to cover even a fraction of current liabilities. Debtors have significantly reduced from £15k to £3k, which may indicate slower sales or collection issues. The large increase in current liabilities, especially trade and other creditors including related party loans, indicates cash flow strain. The company’s negative working capital suggests difficulties in meeting ongoing operational expenses without continued capital injections from shareholders or related parties. There is no indication of positive operating cash flow or profitability to support self-sustaining liquidity.

4. Monitoring Points:

• Monitor changes in current liabilities structure, particularly related party loans, to assess reliance on insider support.
• Watch for improvements in net current assets and cash flow generation from operations.
• Review any new financing arrangements and their terms to evaluate credit risk exposure.
• Track profitability trends and whether losses are being curtailed to rebuild equity.
• Assess management’s plans for asset utilization and working capital improvement.