IR4 LIMITED

Executive Summary

IR4 Limited exhibits a fragile financial position with minimal equity and negative working capital, aggravated by a large increase in current liabilities, particularly tax-related. Despite improved cash balances, the company’s dependence on director advances and lack of profitability data present significant credit risk. Approval of credit facilities is not recommended until a stronger financial profile and clearer cash flow visibility are demonstrated.

IR4 LIMITED - Analysis Report

Company Number: 13595661

Analysis Date: 2025-07-29 16:06 UTC

1. Credit Opinion: DECLINE
   IR4 Limited shows weak financial health with persistent net current liabilities and minimal shareholders' funds (£2), indicating very thin equity. The company’s working capital position worsened slightly from a deficit of £2,792 in 2023 to £1,954 in 2024, despite a significant increase in cash. However, current liabilities increased substantially, particularly taxation and social security liabilities (£36,002 in 2024 vs £5,265 in 2023), suggesting potential cash flow timing issues or tax arrears risk. The absence of audited accounts and an income statement limits insight into profitability and cash generation. The company is relatively new (incorporated 2021) and small in scale, with only two employees. Director advances are notable and unsettled (£4,136 owed to director), indicating reliance on director funding. Overall, the financial position is fragile and poses a high credit risk.

2. Financial Strength:
   The balance sheet is very weak with total net assets of only £2 in 2024, down from £195 the prior year. Fixed assets are minimal (£1,956 net book value), and current liabilities exceed current assets, resulting in negative working capital. The sharp increase in current liabilities, mainly tax-related, raises concerns over financial management and creditor relations. Shareholders’ funds have nearly eroded, reflecting limited retained earnings and minimal capital base. The company’s financial footprint is modest, but the deteriorating liquidity and equity position suggest vulnerability and limited buffer against financial stress.

3. Cash Flow Assessment:
   Cash holdings increased significantly to £28,297 in 2024 from £4,696 in 2023, which is positive for short-term liquidity. However, this is offset by a large rise in current liabilities, leaving net current assets negative. The negative working capital and large tax and social security creditors imply cash flow timing mismatches or unpaid obligations that could trigger enforcement actions. Debtors increased to £5,751 but are largely other debtors rather than trade receivables, which may be less reliable or slower to convert. Reliance on director advances indicates external funding support rather than internal cash generation. Overall, liquidity is precarious and dependent on ongoing director support or external financing.

4. Monitoring Points:

• Current liabilities, especially tax and social security payables, to ensure no arrears or enforcement action.
• Cash flow trends and ability to convert debtors into cash promptly.
• Director advances and any changes in related party transactions.
• Filing of full accounts including profit and loss details to assess profitability and cash generation capacity.
• Any changes in equity or capital structure to improve financial resilience.
• Business activity and revenue trends given the consultancy nature and small scale.