Company Number: 13942688

Analysis Date: 2025-07-29 12:42 UTC

1. Credit Opinion: DECLINE
   Maverick Coatings Ltd exhibits significant financial distress with persistent net liabilities and negative working capital. The company has reported net assets of -£20,167 for the latest year, improving slightly from -£30,263, but still deeply negative. Current liabilities exceed current assets by over £50k, indicating a liquidity shortfall. The director’s loan account is substantial (£27,722) and interest-free, suggesting reliance on director funding to maintain operations. Given the negative net assets and working capital deficits, the ability to meet short-term obligations and service any external debt is questionable. The company is relatively new (incorporated in 2022) with minimal financial history and only one employee, adding to uncertainty. Without clear plans for capital injection or turnaround, extending credit is risky.

2. Financial Strength:
   The balance sheet shows fixed tangible assets valued at £29,976, reduced from prior year, with no indication of impairment. Current assets are low (£10,713), comprised mainly of debtors (£8,423) and a modest cash balance (£2,290). Current liabilities remain high at £60,856, including trade creditors and an interest-free director’s loan of £27,722, which is repayable on demand. The company’s shareholders’ funds are negative (-£20,167), reflecting accumulated losses carried forward. The trend shows some improvement in net liabilities but still reflects weak capitalization and poor solvency metrics.

3. Cash Flow Assessment:
   Cash at bank is minimal (£2,290), insufficient to cover short-term liabilities, indicating liquidity risk. The debtor balance has increased substantially year-on-year, which may reflect either growing sales or collection delays; however, working capital remains negative, which is concerning for day-to-day operational funding. Reliance on director loans suggests external financing is limited. There is no audit, and the company has opted for small company reporting exemptions, limiting transparency on cash flow statements. Overall, current liquidity is weak, and the company may face difficulty in meeting immediate obligations without further capital support.

4. Monitoring Points:

• Liquidity ratios: Current ratio and quick ratio should be monitored quarterly to detect improvement or deterioration in working capital.
• Director loan account: Track changes in the director’s loan balance and whether it remains interest-free and repayable on demand, which impacts cash flow risk.
• Debtor collection period: Assess ageing of trade debtors and effectiveness of credit control to ensure cash inflows.
• Profitability and turnover: Future accounts should be reviewed for signs of revenue growth and profitability to improve net asset position.
• Capital injections or refinancing: Any additional equity or external funding to strengthen the balance sheet and reduce reliance on director loans.
• Compliance with filing deadlines: Continue to ensure timely filing of accounts and confirmation statements to avoid regulatory risk.