MIDLOTHIAN DRIVER TRAINING LTD

Executive Summary

Midlothian Driver Training Ltd shows improving equity and reduced working capital deficits but still faces liquidity pressure evidenced by current liabilities exceeding current assets. The company is active, compliant with filings, and operationally stable with a small workforce. Credit can be extended under conditions focused on monitoring liquidity and financial performance to ensure repayment capability.

MIDLOTHIAN DRIVER TRAINING LTD - Analysis Report

Company Number: SC683951

Analysis Date: 2025-07-20 14:30 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Midlothian Driver Training Ltd demonstrates modest financial strength consistent with a micro-entity. The company’s net assets have improved notably from £3,864 in 2023 to £9,639 in 2024, indicating some positive equity growth. However, persistent net current liabilities (working capital deficits) are a concern, though significantly reduced from -£9,320 to -£2,379. The company is active, with no overdue filings and a stable director profile until early 2025. Credit approval is recommended with conditions including close monitoring of liquidity and cash flows to ensure ongoing ability to meet short-term obligations.

2. Financial Strength:

• The balance sheet shows fixed assets of approximately £12k, which are relatively stable though slightly declined from the previous year.
• Net current liabilities remain negative at -£2,379 but have improved substantially, reflecting better management of payables or receivables.
• Net assets at £9,639 indicate positive equity, providing a buffer against losses.
• Shareholders’ funds have grown, suggesting retained profits or additional capital injection.
• The company operates with 2 employees, consistent with its micro-category.
  Overall, the company shows improving financial health but limited asset base and working capital constraints.

3. Cash Flow Assessment:

• Current assets of £1,085 against current liabilities of £3,464 indicate a liquidity shortfall.
• The reduction in net current liabilities from prior years is positive but still signals potential cash flow pressure to cover short-term debts.
• Absence of detailed profit and loss or cash flow statements limits full assessment of operational cash generation.
• The company’s micro-entity status means less disclosure but also suggests limited complexity and scale.
• Continuous monitoring of receivables collection and creditor payment terms is essential to avoid liquidity risks.

4. Monitoring Points:

• Working capital and net current liabilities should be closely watched for any deterioration, as this is the critical liquidity indicator.
• Timely filing of accounts and confirmation statements to avoid regulatory risk.
• Director changes and any impact on governance or financial control.
• Revenue trends and profitability indicators when available to assess sustainability.
• Any changes in fixed asset utilization or capital expenditure that could impact cash flow.