MONRO DESIGN STUDIO LTD

Executive Summary

Monro Design Studio Ltd has exhibited a sharp decline in financial health over its latest accounting period, with net assets almost fully depleted and increased liabilities indicating liquidity and solvency concerns. The company’s limited fixed assets and thin working capital position reduce its capacity to absorb financial stress or service debt. Given this weak financial profile, credit facilities are not recommended at this time without stronger evidence of improved financial stability or support.

MONRO DESIGN STUDIO LTD - Analysis Report

Company Number: 12604297

Analysis Date: 2025-07-29 14:43 UTC

1. Credit Opinion: DECLINE
   Monro Design Studio Ltd shows a significant deterioration in financial health over the latest reporting period. The net assets have plummeted from £21,026 in 2023 to just £21 in 2024, primarily due to new long-term liabilities of £7,373 and a sharp increase in current liabilities. This indicates potential liquidity stress and raises concerns about the company's ability to meet debt obligations. The lack of substantive shareholder funds and minimal fixed assets further weaken the credit profile. Given these factors, approval for credit facilities is not advisable without substantial mitigating information or guarantees.

2. Financial Strength:
   The balance sheet reveals a micro-entity with very limited fixed assets (£2,473 in 2024, down from £3,297) and a shrinking net asset base. The introduction of creditors falling due after more than one year (£7,373) suggests the company has taken on longer-term debt, but the near-total erosion of equity is concerning. Net current assets have declined sharply to £5,271 from £17,729 the previous year, signaling tighter working capital. Overall, the company’s financial strength is weak, with negligible equity cushion and increasing leverage.

3. Cash Flow Assessment:
   Current assets (£52,705) barely cover current liabilities (£47,434), leaving a thin net working capital buffer. The decrease in net current assets from prior years points to tightening liquidity. Given the small scale of operations (one employee including the director) and limited fixed asset base, cash flow generation capacity appears constrained. Without detailed cash flow statements, the rise in short-term liabilities combined with reduced equity hints at potential cash flow difficulties in servicing debt and operational expenses.

4. Monitoring Points:

• Track changes in net assets and equity to detect further erosion or recovery.
• Monitor current liabilities and creditor aging to assess liquidity pressures.
• Review any further long-term debt or financial commitments that might strain solvency.
• Evaluate trading performance and profitability trends via management accounts if available.
• Watch for director or shareholder injections of capital or restructuring efforts.