Company Number: 13666638

Analysis Date: 2025-07-19 12:43 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   LM TELFORD LIMITED demonstrates positive net current assets and modest but consistent growth in shareholders funds over the last three years, indicating an improving financial position. However, the company operates at a micro scale with minimal asset base and low liquidity buffers, which constrains its ability to absorb financial shocks or support significant credit exposure. Given the thin margins and small working capital, credit approval should be conditional on limiting exposure and requiring regular financial monitoring.

2. Financial Strength:
   The company’s balance sheet shows a steady increase in net assets from £189 in 2021 to £751 in 2024, reflecting retained earnings or capital injections. Current assets slightly exceed current liabilities, providing a positive net working capital position (£751 in 2024 vs. £535 in 2023). The total asset base is very small, consistent with micro-entity classification, and no fixed assets are reported. Equity is the sole financing source with no indication of long-term debt, suggesting low financial risk but limited growth capital.

3. Cash Flow Assessment:
   Current assets (£2,392 in 2024) are mainly liquid or near-liquid given the nature of the business (food service/takeaway). The current liabilities (£1,641) are modest and manageable within this asset base, indicating reasonable short-term liquidity. However, the small absolute values mean cash flow volatility could quickly impact the company’s ability to meet obligations. The reduction in headcount from 3 to 2 employees may reflect cost control efforts to maintain liquidity.

4. Monitoring Points:

• Track quarterly cash flow statements to ensure liquidity remains positive and working capital is stable or improving.
• Monitor receivables and payables aging to detect any delays in collections or supplier payments.
• Review any changes to directors or ownership that might affect governance or credit risk.
• Watch for business growth or contraction signals, especially given small scale and limited capital buffer.
• Confirm timely filing of accounts and returns to avoid regulatory penalties.