FREEHOUSE LTD

Executive Summary

FREEHOUSE LTD has demonstrated a positive financial turnaround with net assets rising to £15,426 and strong cash reserves covering current liabilities. The company remains small with no employees and relies on director loans, which introduces refinancing risk. Credit extension is recommended conditionally, subject to ongoing liquidity monitoring and appropriate security arrangements.

FREEHOUSE LTD - Analysis Report

Company Number: 12577549

Analysis Date: 2025-07-29 18:39 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   FREEHOUSE LTD shows a significant turnaround from prior years, moving from net liabilities to net assets in 2024. However, the company remains small with limited financial history and minimal operational scale (no employees reported). The presence of director loans as current liabilities indicates reliance on insider funding, which may pose a refinancing risk. Given these factors, credit can be extended but with conditions such as monitoring liquidity closely and requiring personal guarantees or additional security.

2. Financial Strength:
   The balance sheet at 30 April 2024 shows net assets of £15,426, a marked improvement from prior years where net liabilities were substantial (e.g., -£1,068 in 2023, -£29,240 in 2021). Current assets stand at £28,065, primarily cash (£27,240), and current liabilities are £13,839, largely comprising director loans. No fixed assets are held, and shareholders’ funds increased mainly through other reserves (£15,293) offset by a small loss retained in P&L (£1,067 deficit). The company is categorized as a small entity with exemption from audit, limiting detailed financial scrutiny.

3. Cash Flow Assessment:
   Cash balances are strong at £27,240 as of year-end, providing liquidity to cover current liabilities comfortably. Net current assets are positive at £28,065, indicating healthy short-term working capital. However, the reliance on director loans (£13,839) classified as current liabilities suggests external borrowing is minimal, but internal borrowing is significant. No employees and minimal trade debtors (£825) imply limited operational cash inflow. Cash flow sustainability should be monitored to ensure ongoing ability to service liabilities without further insider loans.

4. Monitoring Points:

• Track director loan balances and any repayment or further drawdowns.
• Observe subsequent trading results and cash flow reports for operational sustainability.
• Monitor any changes in shareholder funds or equity injections.
• Review upcoming filing deadlines to ensure compliance and transparency.
• Watch for changes in management or control, as both directors resigned in November 2024. Ensure new directors have relevant financial stewardship skills.