HEAD INTERNATIONAL LTD

Executive Summary

Head International Ltd maintains positive net assets and a strong cash position, indicating an ability to meet current liabilities and service modest credit facilities. The company’s financial scale is small with some decline in equity over recent years, suggesting cautious credit limits with conditions and ongoing monitoring are prudent. Overall, the business shows financial stability typical of a small management consultancy but requires attention to receivables and liability trends.

HEAD INTERNATIONAL LTD - Analysis Report

Company Number: SC680992

Analysis Date: 2025-07-29 20:33 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Head International Ltd demonstrates a modest but stable financial position with positive net assets and working capital. However, the company’s small scale (single employee, minimal share capital) and limited asset base suggest a relatively low operational scale and limited financial buffer. The company’s ability to service debt appears adequate given the positive net current assets and cash holdings. Nonetheless, the decline in net assets from £30,555 in 2022 to £20,015 in 2024 signals some erosion of financial strength, meriting close monitoring. Approval is recommended for low to moderate credit limits, subject to ongoing review of cash flow and receivables performance.

2. Financial Strength:

• Net assets stand at £20,015, representing a positive equity position though down from a peak of £30,555 in 2022.
• Fixed assets are minimal (£1,757), consistent with a consultancy business model, indicating low capital intensity.
• The company maintains a strong net current asset position of £18,258, supported by cash of £26,900.
• Current liabilities have increased since 2023 (£16,335 vs £7,330), reducing working capital but still leaving a healthy liquidity margin.
• Share capital is nominal (£1), reflecting limited equity injection but not unusual for a small private limited company.

3. Cash Flow Assessment:

• Cash balance has increased significantly from £6,262 in 2023 to £26,900 in 2024, indicating improved liquidity.
• Debtors have decreased from £16,877 in 2023 to £7,693 in 2024, which could reflect better collections or reduced sales volume; this requires further inquiry.
• Current liabilities jumped to £16,335 in 2024 from £7,330 in 2023, which may pressure short-term liquidity if payables are concentrated.
• Overall, net current assets and cash position suggest the company can meet short-term obligations, but the increase in liabilities warrants monitoring.

4. Monitoring Points:

• Track debtor turnover and ageing to ensure timely collections and prevent cash flow strain.
• Monitor growth or decline in turnover (not disclosed here) to assess sustainability of earnings supporting the balance sheet.
• Regularly review current liability levels and payment patterns to detect any liquidity tightening.
• Observe management’s strategy to address the decline in net assets over recent years.
• Keep watch on any changes in director or ownership that may affect governance or financial stewardship.