Company Number: 13953111

Analysis Date: 2025-07-29 15:09 UTC

1. Credit Opinion: DECLINE. G Parry Limited shows a weak liquidity position with significant current liabilities far exceeding current assets, resulting in negative net working capital. The company carries substantial secured borrowings (£1.82M) against investment properties valued at £2.41M, but cash resources are minimal (£17,981), and current liabilities (£595,698) are very high relative to current assets (£18,181). Given it is newly incorporated (2022) with limited trading history and only micro entity reporting, there is high uncertainty about its ability to meet short-term obligations and service debt. The negative net current assets of -£577,517 raise concerns about near-term cash flow sufficiency and financial resilience. Without evidence of strong cash generation or additional liquidity support, the credit risk is elevated.

2. Financial Strength: The company’s balance sheet is dominated by investment property (£2.41M) funded largely by secured loans (£1.82M). Net assets are marginal at £5,317 reflecting minimal equity and accumulated profits. The gearing ratio is very high due to the significant borrowings relative to equity and asset base. The current liabilities vastly exceed current assets, resulting in negative working capital. While the investment property may provide collateral value, the company’s reliance on debt financing and lack of liquid assets weakens its financial strength. The absence of significant retained earnings and the company's micro classification suggest a small operational scale with limited financial buffer.

3. Cash Flow Assessment: Cash at bank is low (£17,981) against large short-term liabilities (£595,698), indicating potential liquidity stress in meeting immediate obligations. The negative net current assets (-£577,517) highlight insufficient working capital. Debtors are negligible (£200), so receivables do not contribute meaningfully to liquidity. The company’s cash flow appears constrained, making it vulnerable to cash flow mismatches or unexpected expenses. Given the secured loans and investment property, refinancing or asset liquidation might be options, but operational cash flows are not evidenced. Overall, cash flow adequacy is weak, and the risk of short-term default is elevated.

4. Monitoring Points:

• Track quarterly cash flow and liquidity ratios closely, especially current ratio and quick ratio.
• Monitor loan covenant compliance and any changes in secured borrowing terms.
• Watch for updates in financial performance and any signs of revenue or profit generation.
• Review directors’ commentary on operational progress and plans to improve working capital.
• Monitor for any late payments or defaults on current liabilities.
• Keep an eye on property market conditions affecting the value and liquidity of investment properties.
• Assess any changes in ownership or capital injection that might improve equity base.