Company Number: 13477569

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

1. Credit Opinion: CONDITIONAL APPROVAL
   Larks Motor Group Ltd shows a turnaround from negative net current assets and shareholders’ funds in prior years to a positive working capital and equity position as of June 2024. The company is small, recently established (2021), and operates in the used car sales industry. The improvement in liquidity and equity is encouraging, but the relatively modest absolute levels of net assets (£9,147) and cash (£29,307) mean credit exposure should be limited and closely monitored. The director’s loan account balance of £41,294 indicates reliance on director funding, which may pose risk if not managed carefully. Approval is recommended with conditions including limits on facility size and ongoing monitoring of cash flow and creditor levels.

2. Financial Strength:
   The balance sheet reflects a company emerging from earlier losses (shareholders funds were negative £10k in 2023) to a small but positive equity base of £9,147 in 2024. Current assets increased substantially to £53,791 driven mainly by cash and stock (£20,800), while current liabilities rose to £44,644. The net current assets of £9,147 indicate a slight improvement in short-term financial health. The company’s fixed assets are not disclosed, suggesting minimal long-term asset base. Overall, the financial strength is modest and typical of a micro-sized business with limited capitalisation and growing working capital needs.

3. Cash Flow Assessment:
   Cash at bank increased significantly from £1,139 in 2023 to £29,307 in 2024, which is a positive sign of liquidity improvement. Debtors remained fairly stable around £3,600, but trade creditors and other short-term creditors nearly tripled to £44,644, indicating increased liabilities possibly linked to stock purchases or director loans. The director’s loan account of £41,294 shows that the sole director is providing significant short-term funding, which is repayable on demand but currently supports liquidity. The company’s ability to generate positive operational cash flow remains uncertain without P&L data, so close scrutiny of cash inflows and outflows is necessary.

4. Monitoring Points:

• Maintain close watch on working capital trends, especially creditor balances versus cash and stock levels.
• Monitor director’s loan account to assess risk of sudden withdrawal or non-repayment.
• Track turnover and profitability when available to confirm sustainable cash generation.
• Ensure timely filing of accounts and confirmation statements continue, as current compliance is satisfactory.
• Observe any changes in stock valuation or debtor collection periods that could impact liquidity.