HYDRO STYLE UK LIMITED

Executive Summary

Hydro Style UK Limited is a very young company with a weak liquidity position and minimal equity, showing negative working capital and limited cash reserves. The lack of trading history and current liabilities exceeding current assets pose a high credit risk. Approval for credit facilities is not recommended until there is clear evidence of improved financial health and operational cash flow generation.

HYDRO STYLE UK LIMITED - Analysis Report

Company Number: 15238426

Analysis Date: 2025-07-29 12:26 UTC

1. Credit Opinion: DECLINE
   Hydro Style UK Limited is a newly incorporated entity (since October 2023) and has filed its first set of accounts for the period ending October 2024. The financials reveal a weak liquidity position with net current liabilities of £11,454, indicating that current liabilities significantly exceed current assets. The company’s total assets less current liabilities is marginally positive at £658, but this is insufficient buffer for operational or financial shocks. The absence of turnover or profitability data (due to the exemption from filing full accounts) further obscures the company’s ability to generate cash flow to service debt. Given the early stage of the business and weak working capital position, the risk of default on credit obligations is elevated.

2. Financial Strength:
   The balance sheet shows tangible fixed assets net of depreciation of £12,112 and stock valued at £1,309, but current liabilities of £14,198 exceed current assets of £2,744 by a large margin (£11,454 net current liabilities). Shareholders’ funds stand at just £658, reflecting minimal equity investment beyond the nominal share capital of £100 and retained earnings of £558. The company operates with a single director and one employee, indicating limited operational scale. Overall, the financial structure is fragile with a lack of liquidity and minimal equity cushion.

3. Cash Flow Assessment:
   Cash on hand is only £1,435 against current liabilities of £14,198, which implies an inability to meet short-term obligations without additional funding. Negative working capital suggests reliance on external financing or director loans to sustain operations. There is no evidence of profitability or cash generation from trading. The company’s short operating history means no track record to assess cash flow stability or growth potential, raising concerns about its ability to service debt or meet payment terms reliably.

4. Monitoring Points:

• Progress in improving working capital, particularly reduction of current liabilities or increase in current assets.
• Evidence of consistent revenue generation and profitability in subsequent periods.
• Changes in cash balances and liquidity ratios to assess ability to meet short-term commitments.
• Any capital injections or director loans that improve the equity base and liquidity.
• Monitoring director conduct and management decisions, given sole control by Mr. Barry Chippendale.