GFC TKW LIMITED

Executive Summary

GFC TKW LIMITED exhibits a weak financial position characterized by negative net current assets and equity, indicating insufficient liquidity to meet short-term liabilities. The company’s financial trajectory shows deterioration, raising concerns about its ability to service debt and sustain operations. Credit facilities are not recommended without substantial financial improvement or capital support.

GFC TKW LIMITED - Analysis Report

Company Number: 13951169

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

1. Credit Opinion: DECLINE
   GFC TKW LIMITED presents a concerning financial position with net current liabilities of £8,894 as of 31 March 2024, worsening from £5,689 the prior year. The company operates in the take-away food sector, which typically has modest asset bases but requires positive working capital to sustain operations. Despite being a micro-entity with minimal employees, the persistent and increasing net current liability indicates an inability to meet short-term obligations from current assets, highlighting liquidity stress and weak financial stewardship. Given these factors, the company is unlikely to service additional credit without significant improvement in cash flow or equity injection.

2. Financial Strength:
   The balance sheet shows negative net current assets (working capital) of £8,894 in 2024, deteriorating from £5,689 in 2023. Total net assets (shareholders’ funds) mirror this deficit, indicating that liabilities exceed assets by this amount. This negative equity position is atypical for a micro-entity and signals potential insolvency risks if unresolved. No fixed assets are reported, and the company relies solely on minimal current assets. The capital structure is weak with sole control by one director, which may limit external funding options. Overall, the balance sheet health is poor and indicates financial vulnerability.

3. Cash Flow Assessment:
   Current assets are minimal (£789 in 2024), presumably largely cash or receivables, but are insufficient to cover current liabilities (£9,683). This mismatch suggests ongoing liquidity constraints. The accounts do not show cash flow statements, but the negative working capital and growing liabilities imply the company struggles to generate or retain sufficient cash to pay creditors timely. Operating in a cash-intensive food service sector, this liquidity gap raises concerns about the company’s ability to finance daily operations and meet debt service obligations without external support.

4. Monitoring Points:

• Monitor quarterly or interim management accounts for improvement in working capital and cash reserves.
• Watch for any capital injections or changes in ownership structure that might strengthen equity.
• Track payment patterns to suppliers and creditors to detect early signs of financial distress.
• Review director conduct and company compliance filings regularly to ensure no worsening governance issues.
• Evaluate sales trends and profitability metrics to assess operational viability.