Company Number: 13484942

Analysis Date: 2025-07-20 18:38 UTC

1. Credit Opinion: DECLINE
   Hornhill Ltd’s latest financials for the year ending 30 June 2024 show a significant deterioration in liquidity and net assets, moving from a positive net current asset position of £25,513 in 2023 to a negative £20,958 in 2024. This indicates an inability to cover short-term liabilities with current assets, raising substantial concerns about the company’s capacity to meet debt obligations. The reversal from positive equity (£25,513) to negative shareholders' funds (-£20,958) further reflects financial distress and potential insolvency risk. Given the micro-entity scale and lack of audit, the financial stewardship appears weak or at least unproven, suggesting elevated credit risk. Without clear evidence of imminent corrective action or financial support, credit approval is not advised.

2. Financial Strength:
   The balance sheet shows weakening financial strength. The fall in current assets by over 50% (from £78,859 to £33,385) combined with a slight increase in current liabilities (from £53,346 to £54,343) has eliminated positive working capital and pushed net assets into negative territory. Shareholders’ funds have moved from positive to significantly negative, indicating erosion of capital. No fixed assets or long-term assets are reported, limiting collateral value. The company’s micro classification suggests limited scale and resources, raising vulnerability to external shocks.

3. Cash Flow Assessment:
   Cash on hand is not explicitly stated for 2024 but was £9,218 in 2023. Given the sharp decline in current assets, cash liquidity has likely diminished, constraining the company’s ability to cover immediate obligations. Negative net current assets indicate reliance on short-term borrowing or delayed payments, which is unsustainable. Debtor levels were high in 2023 (£69,641), but since total current assets have dropped sharply, collection issues or write-offs may have occurred. Overall, working capital management appears problematic, and cash flow from operations is insufficient to maintain liquidity.

4. Monitoring Points:

• Monitor quarterly cash flow statements for signs of improving liquidity or further deterioration.
• Watch trade debtor collections closely to assess if receivables are being converted to cash.
• Track any director or shareholder injections of capital or guarantees that could stabilize the balance sheet.
• Review management actions or restructuring plans aimed at reducing liabilities or increasing assets.
• Watch for any late filings or changes in company status that might signal worsening conditions.