LONDON RHYMES LIMITED

Executive Summary

London Rhymes Limited shows improving liquidity and a stable balance sheet with zero current liabilities and growing current assets. However, the company remains small with limited net assets and no employees, so credit exposure should be conservative and closely monitored. Overall, the company is creditworthy for modest facilities contingent on continued financial prudence and governance oversight.

LONDON RHYMES LIMITED - Analysis Report

Company Number: 13217431

Analysis Date: 2025-07-29 20:10 UTC

1. Credit Opinion: APPROVE with conditions

London Rhymes Limited is a micro-entity private company limited by guarantee, actively trading since 2021 in the artistic creation and pre-primary education sectors. The company shows a positive trajectory in net current assets and total assets less current liabilities over the last three years, indicating improving liquidity and financial stability. However, the net asset base remains modest (£840) and the company operates with no employees, reflecting a small operational scale. Given the absence of current liabilities in the latest year, the company can service short-term obligations, but the limited capital base and reliance on a single director with full control suggest credit facilities should be modest and closely monitored.

2. Financial Strength:

The balance sheet shows a gradual increase in current assets from £4,792 in 2021 to £9,395 in 2024, while current liabilities have been reduced from £4,411 to zero, improving net current assets significantly from £381 to £9,395. Despite positive working capital improvements, the net assets have remained flat at £840 since 2022, indicating limited retained earnings or capital injections. The company has no fixed assets disclosed, which limits collateral availability. Overall, the financial position is stable but with limited resources suggesting a cautious approach.

3. Cash Flow Assessment:

The company demonstrates sound liquidity with current assets exceeding current liabilities (which are nil in the latest year), providing comfortable short-term cash flow coverage. The increase in accruals and deferred income (from £5,078 to £8,555) may indicate growing advance payments or income recognition timing differences, which should be monitored for cash conversion impact. The absence of employees and presumably low operating costs support lean working capital needs, but cash flows should be reviewed regularly given the small scale and limited financial buffer.

4. Monitoring Points:

• Track net asset growth and retained earnings development to assess capital strengthening.
• Monitor accruals and deferred income trends to understand cash flow timing and potential liquidity risks.
• Maintain oversight on director control and governance to ensure prudent financial management.
• Review operational scale and any changes in employee count or liabilities that may impact working capital.
• Watch for timely filing of statutory accounts and confirmation statements to avoid compliance risk.