N G QUALITY FOODS LTD

Executive Summary

N G QUALITY FOODS LTD is a small micro-entity in the wholesale meat sector with a stable but narrowing financial position. Liquidity remains adequate but current liabilities have risen sharply, warranting close cash flow monitoring. Conditional credit approval is recommended with prudent exposure limits and ongoing review of working capital and profitability trends.

N G QUALITY FOODS LTD - Analysis Report

Company Number: SC677236

Analysis Date: 2025-07-29 20:21 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   N G QUALITY FOODS LTD demonstrates a modest but stable financial position typical of a micro-entity in the wholesale meat products sector. However, the decline in net assets and shareholders’ funds from £37,609 in 2022 to £23,596 in 2023 signals some erosion of financial strength. The company maintains positive net current assets but has seen a significant increase in current liabilities, which raises concerns about short-term liquidity and working capital management. Given the limited scale (1 employee) and modest asset base, credit exposure should be tightly controlled and monitored, with a recommendation for limits aligned to the company’s working capital size and payment performance.

2. Financial Strength
   The balance sheet shows fixed assets of £4,219 and current assets of £113,598 against current liabilities of £91,167 at the latest year end, resulting in net current assets of £22,431. The reduction in shareholders’ funds from £37,609 to £23,596 reflects either distributions, losses, or capital withdrawals. The company’s capital base is minimal (£2 share capital) and relies heavily on current assets for solvency. The financial trajectory shows weakening net asset position over the last year, which may indicate profit erosion or cash strain. The company is still solvent with positive equity and assets exceeding liabilities, but the margin is narrowing.

3. Cash Flow Assessment
   Current assets predominantly consist of receivables and cash equivalents, but with current liabilities doubling from £44,400 to £91,167, liquidity risk is elevated. The net working capital remains positive but has decreased significantly, suggesting tighter cash flow conditions. With only one employee and exemption from audit, detailed cash flow statements are not provided, limiting deeper analysis. The company should be assessed for timely payment of creditors and collection of receivables to ensure ongoing liquidity. Monitoring of trade creditor days and debtor days is essential.

4. Monitoring Points

• Watch for further declines in net assets and shareholders’ funds which may indicate worsening profitability or capital depletion.
• Track the trend and composition of current liabilities to identify if short-term debt or payables are increasing unsustainably.
• Monitor cash conversion cycle metrics: debtor collection and creditor payment terms.
• Observe any changes in business scale or employee count as indicators of operational stability.
• Ensure timely filing of accounts and confirmation statements to maintain regulatory compliance.
• Review any director conduct or PSC changes that might impact governance or control.