MIDLANDS CLASSIC MOTORS LIMITED

Executive Summary

Midlands Classic Motors Limited, a recently formed vehicle maintenance and used car sales company, shows a modest but positive financial position with adequate working capital and no long-term debt. Given its early stage and limited trading history, credit is recommended on a conditional basis subject to ongoing monitoring of profitability, cash flow, and inventory management. The company’s current liquidity and governance structure are satisfactory for small business credit facilities.

MIDLANDS CLASSIC MOTORS LIMITED - Analysis Report

Company Number: 15167700

Analysis Date: 2025-07-20 19:04 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Midlands Classic Motors Limited is a newly incorporated private limited company (incorporated in September 2023) engaged in motor vehicle maintenance and used car sales. The company demonstrates a positive net asset position and working capital surplus for its first financial period, indicating initial financial stability. However, as a start-up with limited trading history and no profit and loss statement provided, credit approval should be conditional on continued monitoring of operational cash flows and timely fulfillment of statutory filings. The absence of an audit is consistent with small company exemptions but limits deeper assurance. Directors have no adverse records, and ownership is concentrated between two individuals, which supports clear governance but concentrates risk.

2. Financial Strength

• Total net assets stand at £22,496, comprised primarily of working capital (£21,092) and minimal tangible fixed assets (£1,872).
• Current assets of £115,139 are mainly inventories (£78,650) and cash (£25,625), offset by current liabilities of £94,047.
• Share capital is nominal (£100), with accumulated reserves reflecting retained earnings of £22,396, suggesting early profitability or capital injection.
• The balance sheet reflects a modest but positive equity base with no long-term debt indicated, reducing financial leverage risk.
• Inventory represents a significant portion of assets, which may be subject to market and obsolescence risks.

3. Cash Flow Assessment

• Cash balance of £25,625 provides a limited liquidity buffer.
• Net current assets of £21,092 indicate positive working capital, suggesting the company can meet its short-term obligations.
• Debtors of £10,864 show some receivables exposure but are not excessive relative to cash and inventory.
• Creditors of £94,047 are sizable but appear to be trade creditors and tax liabilities, typical for an early-stage business managing supplier payments and statutory obligations.
• Without a cash flow statement or profit and loss data, assessment is limited; however, the current liquidity position is adequate for normal trading activities at this stage.

4. Monitoring Points

• Monitor future filing of full accounts including profit and loss statements for insights into profitability and operational cash generation.
• Watch inventory turnover rates and stock valuation to avoid overstocking and potential impairment losses.
• Track creditor days and payment patterns to ensure supplier relationships remain stable and no liquidity strain develops.
• Review subsequent cash flow reports for signs of cash flow volatility or reliance on owner funding.
• Observe any changes in director appointments or ownership that may signal governance risks.