Company Number: 13113534

Analysis Date: 2025-07-20 12:05 UTC

1. Credit Opinion: DECLINE
   Inclusive Farm Ltd shows significant and persistent net liabilities and negative shareholders’ funds (£-15,957 as of January 2024), indicating poor financial health. The company has ongoing negative working capital (net current liabilities of £13,473), and current liabilities significantly exceed current assets, which raises concerns about its ability to meet short-term obligations. The director loan of £20,000 is interest-free with no repayment terms, implying limited external debt servicing capacity and potential reliance on director support rather than operational cash flow. There is no evidence of profitability or positive cash generation to support debt repayment. Given these factors and the small scale of operations (single employee), the company is not currently a strong candidate for credit extension without substantial improvement in financial performance and liquidity.

2. Financial Strength:
   The balance sheet reveals a weak financial position. Tangible fixed assets of £17,516 provide some asset backing, but overall net liabilities and negative equity undermine financial strength. The company continues to carry a director loan treated as long-term creditor, which may not be repayable in the near term. The net current liabilities position worsened slightly from the prior year but remains heavily negative, indicating strained liquidity. No retained earnings or positive reserves exist; accumulated losses have deepened since inception, reflecting ongoing losses or insufficient capital injection.

3. Cash Flow Assessment:
   Cash at bank is low (£289) and has declined sharply from the prior year (£2,713), indicating diminishing liquidity. Debtors are minimal (£320), and stock increased but remains relatively small (£2,842). The company’s current liabilities (£16,924) far exceed current assets, resulting in a working capital deficit that poses immediate liquidity risk. The absence of formal debt repayment schedules and interest-free director loans suggests cash flow constraints and a reliance on director support. The company has minimal operational scale (1 employee), limiting its ability to generate cash internally.

4. Monitoring Points:

• Improvement in working capital and liquidity ratios to reduce short-term solvency risk.
• Movement in net assets and shareholders’ funds to track any capital injection or profitability turnaround.
• Cash balances and debtor turnover to assess operational cash flow generation.
• Status and terms of director loans or other long-term liabilities to understand future cash flow obligations.
• Filing of profit and loss statements or indicators of revenue growth to evaluate business viability.
• Any changes in management or business strategy that may impact financial stability.