IB TYRES AND SERVICE LTD

Executive Summary

IB TYRES AND SERVICE LTD exhibits deteriorating financial health with increasing net liabilities and negative working capital, indicating significant credit risk. The company currently lacks the liquidity and financial strength required to reliably service debt or credit facilities. Close monitoring of operations and financial filings is essential before reconsidering credit exposure.

IB TYRES AND SERVICE LTD - Analysis Report

Company Number: 14379508

Analysis Date: 2025-07-29 15:54 UTC

1. Credit Opinion: DECLINE
   IB TYRES AND SERVICE LTD demonstrates persistent negative net assets and net current liabilities over the past two years, indicating ongoing financial distress. The company’s inability to generate positive working capital suggests weak liquidity, raising concerns about its capacity to meet short-term obligations and service any credit facilities. Given the limited financial history and lack of profitability data, the credit risk is heightened, and approval of new credit exposure is not recommended at this stage.

2. Financial Strength:
   The company is classified as a micro entity with a balance sheet showing net liabilities of £3,429 as of 30 September 2024, worsening from £1,267 the previous year. Total current liabilities (£4,101) significantly exceed current assets (£672), resulting in negative net current assets of £3,429, which reflects poor financial stability. Shareholders' funds are negative, indicating erosion of equity and an insolvent balance sheet position. The increasing deficit over two years signals no improvement in financial resilience.

3. Cash Flow Assessment:
   The negative working capital position strongly suggests liquidity constraints. The company holds minimal current assets, likely mostly cash or receivables, which are insufficient to cover immediate liabilities. The absence of profit and loss data limits cash flow visibility, but the balance sheet trends imply ongoing cash outflows or operating losses. This weak liquidity position casts doubt on the company’s ability to fund day-to-day operations or repay short-term debts without external support.

4. Monitoring Points:

• Monitor changes in current assets and liabilities to detect any improvement in liquidity.
• Watch for filing of profit and loss accounts to assess profitability trends.
• Track any capital injections or shareholder loans that may shore up equity.
• Observe director and shareholder actions for restructuring or operational changes.
• Review industry conditions in vehicle maintenance and used car sales for any sector-specific risks.