Company Number: 13003376

Analysis Date: 2025-07-20 14:41 UTC

1. Credit Opinion: APPROVE with reservations. Kabul Bakery Ltd demonstrates a positive turnaround in financial health in its latest financial year, moving from net liabilities to net assets. The company is small, with micro-entity status and limited financial complexity, but the positive working capital and net asset position indicate improved ability to meet short-term obligations. However, the company remains small with modest asset and capital bases, so credit exposure should be limited and monitored closely.

2. Financial Strength: The balance sheet shows a strengthening trend. As of 30 November 2023, net current assets stand at £2,507, up from negative £1,228 the prior year. Net assets improved similarly from negative £1,228 to positive £2,507. The company has minimal share capital (£1.00) indicating limited equity buffer, but the incremental improvement in equity is positive. The asset base is small and primarily current assets, indicating limited fixed asset investment.

3. Cash Flow Assessment: Current assets of £13,384 against current liabilities of £10,877 show a modest positive working capital. This suggests the company should be able to cover short-term liabilities from liquid assets. The increase in current assets year-on-year and controlled liabilities indicates improving liquidity. However, absolute cash balances and cash flow statements are not provided, so monitoring day-to-day liquidity remains important.

4. Monitoring Points:

   • Continued improvement or at least maintenance of positive working capital and net assets.
   • Profitability trends and cash flow generation once full profit and loss accounts become available.
   • Any changes in current liabilities that might pressure liquidity.
   • Management’s ability to scale operations beyond the micro-entity level while maintaining financial discipline.
   • Potential impact of market or economic factors on this niche bakery business classified under "Other service activities not elsewhere classified."