Company Number: 13612624

Analysis Date: 2025-07-29 20:25 UTC

1. Credit Opinion: DECLINE
   Green Folk Ltd shows a concerning deterioration in financial strength over the latest reporting period. While the company has positive net current assets, it recorded a dramatic drop in net assets from £98,968 in 2023 to just £473 in 2024. This is primarily due to a new significant creditor liability falling due after more than one year (£126,715) introduced in 2024, which heavily erodes the equity base. The sudden increase in long-term liabilities without a corresponding asset increase suggests potential liquidity pressure and increased financial risk. Given the micro-entity status and limited financial disclosure, there is insufficient evidence of robust cash flow generation or financial resilience to support additional credit facilities at this time.

2. Financial Strength:

• Fixed assets are minimal and declining (£5,480 in 2023 to £4,193 in 2024).
• Current assets increased modestly (£180,031 to £201,707), driven likely by working capital.
• Current liabilities increased from £90,855 to £83,282 (a slight improvement), but the emergence of significant long-term liabilities (£126,715) in 2024 materially worsens the capital structure.
• Net assets plummeted from a healthy £98,968 to a precariously low £473, indicating near insolvency equity-wise.
• The company holds a very thin equity buffer against liabilities, raising concerns about financial stability.

3. Cash Flow Assessment:

• Net current assets remain positive and increased from £94,338 to £124,271, indicating short-term liquidity is adequate.
• However, the introduction of long-term creditors and the drastic reduction in net assets imply cash flow may have been strained or obligations deferred rather than fully met.
• The company has 7 employees, and no reported audit or detailed cash flow statement limits visibility on operational cash generation.
• Working capital management appears reasonable, but reliance on creditor financing raises questions about sustainable cash flow to service debts.

4. Monitoring Points:

• Track changes in long-term liabilities and their terms to assess debt service obligations.
• Monitor net asset movements closely for any further erosion of equity.
• Review upcoming filings for cash flow statements and profit & loss to evaluate operational cash generation.
• Assess any changes in shareholder funding or capital injections to bolster financial resilience.
• Watch for any director or control changes that may impact governance or strategic direction.