JAPANESE PAL IMPORTS LTD

Executive Summary

Japanese Pal Imports Ltd is a start-up with negative equity and limited financial resources, raising concerns about its ability to service debt. The company’s cash position is small relative to liabilities, and management experience appears limited. Credit approval is not recommended without significant credit enhancements or business performance improvements.

JAPANESE PAL IMPORTS LTD - Analysis Report

Company Number: 15177598

Analysis Date: 2025-07-20 17:58 UTC

1. Credit Opinion: DECLINE
   Japanese Pal Imports Ltd is a newly incorporated entity (September 2023) with limited operating history. The latest accounts show net liabilities of £6,041 and negative shareholders’ funds, indicating initial losses or start-up costs exceeding capital. Current liabilities exceed current assets, creating a working capital deficit when considering all liabilities, which raises concerns about liquidity. The sole director is a student, which may suggest limited business and financial management experience. Given the limited trading track record, negative equity, and potential management risk, extending credit facilities at this stage would be high risk without significant additional security or guarantees.

2. Financial Strength:
   The balance sheet reflects a weak financial position with net liabilities of £6,041 at year-end. Current assets of £19,279 (all cash) are offset by current liabilities of £25,320 due after more than one year. The company has minimal fixed assets and only £1 in share capital, highlighting very low capitalization. Negative shareholders’ funds confirm the company is currently insolvent on a net asset basis, although this may reflect early-stage start-up losses rather than operational failure. The absence of turnover and profit data prevents assessment of revenue generation or profitability.

3. Cash Flow Assessment:
   Cash of £19,279 is the only current asset, indicating limited liquidity resources. The company’s current liabilities exceed this amount, though they are classified as amounts falling due after more than one year, which provides some breathing room on repayment timing. However, the negative equity and small cash base suggest the company may face cash flow pressures if liabilities become due sooner or revenues fail to materialize. Working capital is negative if all liabilities are considered, indicating weak short-term liquidity.

4. Monitoring Points:

• Track future turnover and profitability to assess operational viability and ability to generate cash flows.
• Monitor changes in working capital and cash balances to detect liquidity improvements or deterioration.
• Review director and management experience and any changes that could influence financial stewardship.
• Watch for timely filing of accounts and confirmation statements to ensure regulatory compliance and transparency.
• Observe any additional capital injections or reduction in liabilities to improve net asset position.