Company Number: 13815777

Analysis Date: 2025-07-29 15:06 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   KOLI PERI PERI LTD is an active micro private limited company operating in the takeaway food sector with a single director and controlling shareholder. The company shows a positive net asset position but with very modest equity (£2,250 in 2023) and a relatively high level of current liabilities compared to current assets, indicating tight liquidity. The rise in fixed assets suggests investment in operational capacity, and employee numbers increased from 5 to 7, reflecting growth ambitions. However, the company’s working capital is negative as reported (Net Current Assets: -£182,420 in 2023), which raises concerns about short-term payment capability. Given the limited financial buffer and sector risks, credit should be extended cautiously, possibly with short-term or secured facilities and close monitoring.

2. Financial Strength:
   The balance sheet shows fixed assets growing from £142,972 in 2022 to £185,079 in 2023, evidencing capital investment. Current assets are stable (~£56k), but current liabilities increased sharply to £247,830 in 2023 from £203,947 in 2022, causing net current liabilities to worsen from £140,201 to £182,420. Total net assets remain positive but very low at £2,250 (£2,771 in 2022). Shareholders’ funds are minimal, which limits the company’s ability to absorb shocks. The presence of a small long-term creditor (£409) in 2023 is noted. Overall, the financial strength is weak due to low equity and high short-term obligations.

3. Cash Flow Assessment:
   The company has a working capital deficit, which suggests potential liquidity strain. Current liabilities exceed current assets by a substantial margin, implying reliance on short-term borrowing or supplier credit to meet obligations. The increase in employees from 5 to 7 adds overhead costs, which must be supported by cash inflows. Without detailed cash flow statements, the working capital position and balance sheet imply the company may face challenges in maintaining smooth day-to-day operations and debt servicing without additional funding or improved cash management.

4. Monitoring Points:

• Monitor current ratio and net current assets quarterly to assess liquidity trends.
• Track accounts payable and receivable aging to identify cash flow bottlenecks.
• Review fixed asset utilization to ensure capital investments translate into revenue growth.
• Watch profitability metrics and cash conversion cycle to confirm ability to generate internal funds.
• Follow director’s commitment and any changes in ownership or management that could impact governance or control.
• Keep abreast of sector conditions as takeaway food businesses can be sensitive to economic downturns and competition.