GORSE IT SOLUTIONS LIMITED

Executive Summary

GORSE IT SOLUTIONS LIMITED demonstrates adequate short-term financial health with positive net current assets and no long-term debt. However, a significant decrease in net assets due to high dividends has weakened its capital base, and cash reserves have diminished substantially. Conditional credit approval is advised, subject to close monitoring of liquidity, dividend policy, and operational performance going forward.

GORSE IT SOLUTIONS LIMITED - Analysis Report

Company Number: 13570058

Analysis Date: 2025-07-29 21:03 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   GORSE IT SOLUTIONS LIMITED is an active private limited company operating in IT consultancy since August 2021. It shows a positive net asset position (£37,383) and net current assets of £36,297 as of August 2024, signaling an ability to cover short-term liabilities. However, the sharp decline in net assets from £90,303 in 2023 to £37,383 in 2024, mainly due to significant dividend payments exceeding profits, raises concerns about retained earnings and capital preservation. The company has no long-term debt, reducing financial risk, but the low level of current assets and cash compared to the previous year indicates reduced liquidity. The director's ongoing involvement and full ownership provide management continuity, but the business remains small with only one employee, limiting operational scale and resilience. Approval is recommended with conditions to monitor cash flow closely and any further dividend distributions.

2. Financial Strength:

• Net assets decreased from £90,303 (2023) to £37,383 (2024).
• Current assets dropped significantly from £131,690 to £52,334, mostly cash reduction from £131,662 to £51,354.
• Current liabilities reduced from £42,474 to £16,037, mostly tax and social security, indicating improved short-term obligations management.
• No fixed asset growth, with minimal tangible assets around £1,086.
• Shareholder funds mirror net assets, showing no external equity injection.
  The balance sheet shows a weakening capital base and liquidity but no gearing risk due to absence of long-term liabilities.

3. Cash Flow Assessment:

• Cash balances are adequate at £51,354 but down sharply from previous year, suggesting cash outflows possibly for dividend payments (£111,735 dividends paid vs £58,815 profit).
• Net current assets positive at £36,297, indicating sufficient working capital to meet immediate short-term liabilities (£16,037).
• Debtors minimal at £980, implying low credit risk from customers or limited sales on credit.
• The company’s liquidity position requires careful monitoring to ensure ongoing operational funding without dependence on external credit.

4. Monitoring Points:

• Track cash flow trends quarterly to detect any liquidity stress early.
• Monitor dividend policy to avoid eroding capital base and ensure sufficient retained earnings for business continuity.
• Watch tax liabilities closely, as they constitute majority of current liabilities.
• Review revenue and profitability trends once income statements become available to assess business growth and repayment capacity.
• Observe any changes in director ownership or control that could impact governance or financial strategy.