JOE & SUM CREATION LIMITED

Executive Summary

JOE & SUM CREATION LIMITED demonstrates a weak financial position characterized by negative equity, minimal liquidity, and heavy reliance on long-term debt. The lack of profitability and small operational scale raise significant credit risk concerns. Given current data, the company is not recommended for credit approval without substantial improvements in financial health and cash flow generation.

JOE & SUM CREATION LIMITED - Analysis Report

Company Number: 14154571

Analysis Date: 2025-07-29 20:07 UTC

1. Credit Opinion: DECLINE
   JOE & SUM CREATION LIMITED shows significant financial weakness with persistent net liabilities over the last three years, declining shareholders’ funds (from -£45k to -£52k), and very limited liquidity (cash balance only £3,269 against current liabilities of £2,320). The company’s ability to service its long-term debt (£432,780) including an interest-only mortgage and director loan is highly questionable given the lack of profitability and negative equity. The absence of an audit and very small employee base (average 1) further raises concerns about operational scale and financial control. Without clear evidence of improving cash flow or profitability, the risk profile is too high for credit approval.

2. Financial Strength:
   The company’s balance sheet is heavily leveraged, with fixed tangible assets valued at £379k largely funded by unsecured long-term debt of £432k plus minimal equity. Net current assets are negligible but positive at £949, providing very limited short-term buffer. Negative shareholders’ funds and accumulated losses reflect ongoing financial stress. The mortgage structure being interest-only suggests principal repayment risk on maturity. The director loan is unsecured and interest waived, indicating potential management support but also dependency on insiders rather than external funding.

3. Cash Flow Assessment:
   Cash at hand is minimal and current liabilities, although low (£2,320), are almost fully matched by current assets, leaving little working capital flexibility. The company’s main liabilities are long term and include an interest-only mortgage, which does not reduce principal. There is no disclosure of trading profitability or positive cash inflows; the losses accumulated imply negative operating cash flow. The declining employee count and exemption from audit may mask operational challenges. Liquidity risk is heightened without clear evidence of incoming revenues or cash generation.

4. Monitoring Points:

• Monitor monthly cash flow statements and operating profits closely for signs of improvement.
• Track any changes in director loans or additional financial support from shareholders.
• Review the company’s plan for mortgage principal repayment or refinancing before maturity.
• Watch for filing of audited accounts or improvement in governance signaling stronger financial management.
• Observe any increase in business activity or employee count as a proxy for growth.