GUITAR SPACE GOSFORTH LTD

Executive Summary

Guitar Space Gosforth Ltd is an early-stage micro business with a weak financial position evidenced by negative net assets and net current liabilities as of June 2024. The absence of detailed profit and loss information and limited cash resources raise significant concerns about its ability to meet short-term obligations or service debt. Credit facilities are not recommended at this time without substantial improvement in financial metrics and cash flow generation.

GUITAR SPACE GOSFORTH LTD - Analysis Report

Company Number: 14151612

Analysis Date: 2025-07-29 13:55 UTC

1. Credit Opinion: DECLINE
   Guitar Space Gosforth Ltd, a micro-entity incorporated in June 2022, shows a weak financial position as of its latest accounts dated June 2024. The company has net current liabilities (£362) and negative net assets (£662), indicating insolvency on a balance sheet basis. With minimal cash (only £1 reported in 2023) and no profit and loss details disclosed, there is no evidence of operating cash flow generation or profitability. The business is in early stages but already shows net liabilities and no buffer to meet short-term obligations. The single director/shareholder structure restricts external oversight and diversification of management risk. Given these factors, the company currently lacks sufficient financial strength or cash flow to service credit facilities.

2. Financial Strength:
   The balance sheet is weak with total liabilities exceeding current assets, resulting in negative net assets and shareholders’ funds. The company’s capital structure is eroded, with £662 negative equity. The lack of fixed assets or other tangible resources further limits collateral value. The micro-entity scale and minimal employee base (1 person) limit operational scale and financial resilience. No audit or detailed profit and loss figures were provided, reducing transparency. Overall, financial strength is poor and below standard for extending credit beyond very limited levels.

3. Cash Flow Assessment:
   No specific cash flow statement or profit and loss account was filed, but the reported cash position and net current asset figures suggest very limited liquidity. The company’s net current liabilities and accruals/deferred income (£300) imply obligations exceeding available cash or receivables. This indicates a working capital deficit and potential short-term cash flow stress. Without clear revenue or profit data, the ability to generate positive operating cash flow remains unproven. The single director’s occupation as a music teacher suggests a small-scale operation with limited external funding.

4. Monitoring Points:

• Monitor future filings for profit and loss statements to assess revenue growth and operational profitability.
• Watch changes in net current assets and cash balances to track liquidity improvements or further erosion.
• Track any new financing or capital injections that might strengthen the balance sheet and reduce negative equity.
• Observe the director’s ongoing involvement and any changes in management or ownership structure that could impact governance.
• Check for timely submission of future accounts and confirmation statements, indicating compliance and stability.