GARETH ANDREW DAVIES LTD

Executive Summary

GARETH ANDREW DAVIES LTD shows signs of deteriorating liquidity and a significant decline in net assets over the last year, raising concerns about its ability to meet short-term liabilities and service credit facilities. The company’s micro scale and sole director/shareholder structure increase risk, and without clear profitability or cash flow data, credit approval is not recommended at present. Ongoing monitoring of working capital and operational performance is essential for any future credit consideration.

GARETH ANDREW DAVIES LTD - Analysis Report

Company Number: 13645469

Analysis Date: 2025-07-29 12:42 UTC

1. Credit Opinion: DECLINE
   GARETH ANDREW DAVIES LTD demonstrates a weakened liquidity position with net current liabilities of £3,573 as of the latest fiscal year end 31-12-2023, a significant deterioration from net current assets of £25,789 the prior year. The reduction in working capital and current assets, combined with rising current liabilities, signals potential short-term cash flow stress. The company is a micro entity with limited scale and only one employee, which increases operational risk. Without clear profitability data and with limited asset base, the capacity to service new or increased credit facilities is questionable. The director’s occupation as a journalist and sole shareholding suggest limited diversification or financial management bandwidth. Overall, credit risk is elevated, and approval is not recommended unless significant mitigating factors or support arrangements exist.

2. Financial Strength:
   The balance sheet shows total net assets decreased markedly from £50,683 in 2022 to £20,986 in 2023, mainly driven by a sharp decline in current assets (from £183,846 to £12,534) and a sustained level of fixed assets (~£24,500). Current liabilities remain high relative to current assets, resulting in a negative working capital position. The company's micro classification reflects small scale and minimal financial buffers. The reduction in net assets may indicate operating losses or asset write-downs, though profit and loss details are unavailable. The equity base remains positive but has contracted by over 50%, weakening financial resilience.

3. Cash Flow Assessment:
   Negative net current assets imply a liquidity shortfall; current liabilities exceed readily available current assets. The dramatic drop in current assets suggests cash or receivables have been depleted, raising concerns about cash flow sustainability. The company has only one employee, indicating low fixed overheads but also limited operational capacity. Without detailed cash flow statements, it is difficult to confirm cash generation, but the balance sheet trend points to potential difficulties meeting short-term obligations without external funding or owner support.

4. Monitoring Points:

• Working capital and current ratio trends in upcoming accounts filings.
• Any changes in director or ownership structure that may affect financial management.
• Timeliness of statutory filings, given company compliance is currently up to date.
• Profit and loss performance once available to assess operational profitability or loss trends.
• Any indications of increased borrowing or overdue trade payables.
• Market and sector conditions impacting artistic creation activities, given SIC classification 90030.