ITXI LTD

Executive Summary

ITXI LTD is an active micro-sized IT services company with a stable but declining net asset base and tightening working capital. The recent reduction in liquidity and increased current liabilities suggest cautious credit exposure. Conditional approval is recommended with close monitoring of cash flow and financial stability to mitigate risk.

ITXI LTD - Analysis Report

Company Number: 13119451

Analysis Date: 2025-07-20 13:50 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   ITXI LTD shows a positive net asset position and has maintained an active trading status since incorporation in 2021. However, a significant decline in net assets from £23,883 (2023) to £10,330 (2024) raises concerns regarding recent financial performance or capital withdrawals. The current liabilities nearly doubled from £11,243 to £22,847 year-over-year, reducing working capital and potentially increasing liquidity risk. The director loan balance has been substantially repaid, which reflects some capital restructuring, but the unsecured nature of this loan and its on-demand repayment terms could impact cash flow stability. Overall, the company demonstrates operational capability but requires close monitoring of its liquidity and profitability trends before full credit approval.

2. Financial Strength:
   The balance sheet remains modest but solvent, with net assets of £10,330 as at 31 January 2024. Fixed assets are minimal (£2,452), indicating a low capital-intensive business model typical for IT consultancy and wholesale. The reduction in net current assets from £22,401 to £7,878 is concerning, driven by a near doubling of current liabilities to £22,847. The shareholders’ funds have decreased significantly, suggesting either distributions, losses, or repayment of director loans. The company classification as Micro means financial statements are simplified and less detailed, which limits insight into profitability. No indications of insolvency or distress are present, but the financial buffer is thin.

3. Cash Flow Assessment:
   Current assets standing at £30,725 against current liabilities of £22,847 yield a positive working capital of £7,878, but a substantial drop from the prior year’s £22,401. This suggests tightening liquidity. The director loan repayments during the year (£103,354 repaid) imply reliance on internal financing which has now decreased, potentially increasing reliance on external credit or operational cash flow. The lack of audit and limited disclosures means cash flow from operations is not clearly visible, but the decline in net working capital warrants close attention to the company’s ability to meet short-term obligations and service debt.

4. Monitoring Points:

• Track quarterly cash flow and working capital trends closely to detect early signs of liquidity stress.
• Monitor changes in current liabilities, especially trade creditors and any short-term borrowings.
• Review director loan account movements for any non-arm’s length transactions or further capital injections/withdrawals.
• Keep an eye on profitability indicators and any changes in business model or trading volume that could impact cash generation.
• Ensure timely filing of accounts and confirmation statements continue to avoid compliance risks.