Company Number: 12634891

Analysis Date: 2025-07-29 20:41 UTC

1. Credit Opinion: DECLINE
   Good Fabric Ltd demonstrates persistent net liabilities and negative shareholders’ funds over the past four reported years, indicating ongoing losses and insufficient capitalisation. The company’s net current liabilities position and negative net assets suggest an inability to meet short-term obligations without external support. The absence of significant cash reserves and negative working capital further undermine their capacity to service debt. Without clear evidence of turnaround or strong financial backing, extending credit poses a high risk.

2. Financial Strength:
   The balance sheet reveals a weak financial position. Net assets have deteriorated from a positive £1,550 in 2020 to a negative £4,068 in 2024. Current liabilities exceed current assets by £4,480 in 2024, improving slightly from a £8,609 deficit in 2023 but still indicating liquidity stress. Fixed assets are negligible (£412 in 2024) and offer limited security. Share capital is minimal (£100), and accumulated losses exceed £4,000. The company remains a micro-entity with limited scale and capital buffer.

3. Cash Flow Assessment:
   Cash on hand declined sharply from £2,661 in 2023 to £892 in 2024, reflecting liquidity constraints. Negative net current assets indicate working capital deficits, likely forcing reliance on short-term credit or delayed creditor payments. Stock levels have increased but may be illiquid. The lack of debtors (receivables) suggests limited credit sales or slow collections. Overall, cash flow management appears weak, with no clear evidence of improvement in liquidity or cash conversion cycle.

4. Monitoring Points:

• Monitor cash balances and cash flow forecasts closely for signs of improvement or deterioration.
• Track creditor days and any delays in payments to suppliers, as this could indicate worsening liquidity.
• Review any new funding or capital injections to offset losses and improve net assets.
• Observe sales growth trends and gross margins to assess operational sustainability.
• Watch for director or shareholder interventions to recapitalise or restructure liabilities.