IN DEMAND SOLUTIONS LTD

Executive Summary

IN DEMAND SOLUTIONS LTD is a newly formed small retail company with a positive but modest financial position supported by director funding. While the balance sheet shows sound equity and working capital, the company’s limited trading history and reliance on related party loans warrant a cautious credit approach. Conditional approval with ongoing monitoring of cash flow and financial performance is recommended to manage the risk during this early stage.

IN DEMAND SOLUTIONS LTD - Analysis Report

Company Number: 15600601

Analysis Date: 2025-07-20 16:09 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   IN DEMAND SOLUTIONS LTD is a newly incorporated small private limited company with its first set of accounts showing a modest but positive financial position. The company has net assets of £25,687 and net current assets of £12,809, indicating a positive working capital position. However, the company has a significant portion of current liabilities (£37,530) that include £22,265 owed to related parties (interest-free director loans), which suggests some reliance on director funding. Given the company's recent incorporation (less than 1 year), limited trading history, and reliance on director loans, credit facilities should be approved with conditions such as regular financial monitoring and limits on exposure until a longer trading record and stronger cash flow are established.

2. Financial Strength:
   The balance sheet shows a modest asset base dominated by £32,191 in stock and £18,148 in cash, with fixed assets of £13,365 (including goodwill and office equipment). Shareholders’ funds stand at £25,687, with all equity provided by the sole director/shareholder. The presence of goodwill of £10,800 is noteworthy for a start-up and suggests acquisition or intangible value but also potential impairment risk. The company’s gearing is low, with no external debt beyond director loans, which reduces financial risk. Overall, the balance sheet is sound for a first-year company but reflects a typical early-stage capital structure with limited financial depth.

3. Cash Flow Assessment:
   Cash on hand at £18,148 provides some liquidity buffer, but current liabilities of £37,530 require close management. The company’s net current assets of £12,809 indicate positive working capital, but the high level of trade creditors and related party balances suggests cash flow may be tight. The director’s interest-free loans indicate reliance on internal support rather than external finance, which could constrain liquidity if the business does not generate sufficient operating cash flow. Monitoring cash conversion cycles and receivables/payables management will be critical.

4. Monitoring Points:

• Regular review of cash flow forecasts and actual cash balances, especially given the high current liabilities.
• Watch for any changes in director funding or related party transactions that could affect liquidity.
• Monitoring stock levels and turnover to avoid excess working capital tied in inventory.
• Profitability trends and ability to generate positive operating cash flow in subsequent periods.
• Timely filing of future accounts and confirmation statements to maintain compliance and transparency.