Company Number: 15161153

Analysis Date: 2025-07-20 17:37 UTC

1. Credit Opinion: CONDITIONAL APPROVAL. Monochrome Quality Services Ltd is a very recently incorporated entity (since September 2023) operating in technical consulting (SIC 71122) with very limited financial history. The latest accounts to 31 March 2025 show a small positive net current asset position and positive shareholders’ funds after previously being negative. This indicates initial progress towards financial stability. However, the small scale of operations, low asset base (£4.6k current assets), modest working capital (£320 net current assets), and reliance on director support for going concern warrant cautious credit exposure. Approval is recommended subject to limits consistent with its micro/small company status and regular monitoring.

2. Financial Strength: The company’s balance sheet is very modest with total current assets of £4,645 including cash of £3,812 and debtors £833. Current liabilities have reduced from £7,185 in 2024 to £4,325 in 2025, improving net current assets from a deficit of £608 to a positive £320. Shareholders’ funds have turned from a deficit of £709 to a positive £320, reflecting an improved retained earnings position (£219 profit and loss reserve). The company has no fixed assets reported. The capital structure is minimal, with £101 called-up share capital held by the sole director and 75-100% shareholder. The company is still in its infancy and has a very thin equity base, limiting its financial resilience.

3. Cash Flow Assessment: Cash at bank has decreased from £5,977 to £3,812 over the last 12 months, indicating some cash outflow or investment in working capital. Debtors have increased slightly, suggesting some credit sales but the level is low (£833). Current liabilities have reduced significantly, primarily from "other creditors" and tax/social security liabilities. The company’s net current asset position of £320 is positive but marginal, indicating limited liquidity cushion. Given the small scale, cash flow is likely tightly managed and the company depends on director funding or timely collection of receivables to meet obligations.

4. Monitoring Points:

• Liquidity trends: Monitor cash balances, debtor days, and creditor terms to ensure working capital sufficiency.
• Profitability development: Watch for improved retained earnings and transition from losses to profits.
• Timely filing of accounts and confirmation statements to ensure compliance.
• Director support: Confirm ongoing shareholder/director funding or guarantees if needed.
• Business development: Track contract wins or revenue growth as indicators of sustainability.
• Changes in creditor or tax liabilities that may strain liquidity.