LIQUID LIGHT GROUP INVESTMENTS LTD

Executive Summary

Liquid Light Group Investments Ltd demonstrates significant liquidity weakness and substantial reliance on intra-group financing to cover current liabilities, resulting in a precarious financial position. The company’s minimal equity and negative working capital strongly indicate incapacity to service external debt at this stage. Given these financial constraints and lack of operational income, credit approval is not recommended without substantial improvement in liquidity and cash flow metrics.

LIQUID LIGHT GROUP INVESTMENTS LTD - Analysis Report

Company Number: 14154504

Analysis Date: 2025-07-29 13:13 UTC

1. Credit Opinion: DECLINE
   Liquid Light Group Investments Ltd shows very weak liquidity and working capital positions, with current liabilities far exceeding current assets in both the latest and prior financial years. The company’s net current liabilities exceed £500k, indicating severe short-term cash flow stress. The majority of current liabilities are amounts owed to group undertakings, suggesting reliance on intra-group financing rather than operational cash flow. Without evidence of significant revenue generation or cash inflow, the ability to service external debt is highly questionable. The company is also very young (incorporated 2022) with minimal operating history, increasing credit risk.

2. Financial Strength:
   The company's balance sheet is heavily weighted towards fixed assets (£510,957), representing land and property held at cost. Net assets remain positive but marginal (£1,007 in 2024 versus £1,300 in 2023), reflecting a very thin equity base. Shareholders’ funds have declined slightly year-on-year. There is no indication of retained earnings growth or profitability, as profit & loss reserves are minimal (£907). The company’s gearing is effectively very high given the large current liabilities funded by related parties, indicating financial leverage but limited external borrowing.

3. Cash Flow Assessment:
   Cash at bank has fallen significantly from £24,830 in 2023 to £5,166 in 2024. Debtors remain negligible and the company reports no employees, suggesting limited trading activity. The negative net current assets position (-£509,950) highlights poor liquidity and inability to meet short-term obligations from current assets. The reliance on amounts owed to group undertakings for current liabilities implies the company depends on intra-group funding to cover cash flow gaps, which may not be sustainable or available to external creditors.

4. Monitoring Points:

• Liquidity ratios and working capital improvements: current ratio and quick ratio trends.
• Cash flow from operations or external financing sources to reduce current liabilities.
• Changes in amounts owed to group undertakings as a proxy for external funding dependence.
• Development of operating income or profitability to build equity and reduce reliance on related party debt.
• Any changes in fixed assets valuation or disposals that impact balance sheet strength.