NEURALRAYS LABS LTD

Executive Summary

Neuralrays Labs Ltd exhibits a weak financial profile with negative net assets and minimal liquidity, raising significant concerns about its ability to meet credit obligations. Despite some growth in receivables, the company's current liabilities exceed its assets and cash reserves are negligible, resulting in a high risk credit profile. Credit extension is not advised without evidence of improved financial stability and cash flow.

NEURALRAYS LABS LTD - Analysis Report

Company Number: 12859274

Analysis Date: 2025-07-29 18:36 UTC

1. Credit Opinion: DECLINE
   Neuralrays Labs Ltd demonstrates persistent negative net assets and shareholder funds, deteriorating from -£1,030 in 2022 to -£8,534 in 2023. The company's liabilities exceed its current assets substantially, indicating a weak financial position and insufficient buffer to meet obligations. The absence of cash reserves (only £1 in 2023) and reliance on debtors for current assets raises concerns about liquidity and the practical ability to service debt. No employees are recorded, suggesting limited operational scale and possibly minimal internal controls or management capacity. Given these factors, the company poses a high credit risk and is not recommended for credit approval without significant improvement in financial health and cash flow.

2. Financial Strength
   The balance sheet reflects a small, private technology consultancy with current assets largely composed of debtors (£44,286 in 2023) but negligible cash. Current liabilities have increased markedly to £52,821, leading to negative net current assets (-£8,534). The net asset value is negative, indicating that liabilities exceed assets, which is a critical weakness in financial strength. The company’s equity base is minimal (£100 share capital) and has been eroded by accumulated losses (losses reflected in profit and loss account of -£8,634). This signals insufficient capitalization and lack of retained earnings to support operations or absorb shocks.

3. Cash Flow Assessment
   The company holds almost no cash, with only £1 available at year-end 2023, implying very limited liquidity. High current liabilities coupled with low cash suggest potential difficulties in meeting short-term obligations. The large debtor balance indicates revenue generation but also exposes the company to collection risks; if these receivables are not collected timely, liquidity pressures will intensify. The absence of employees points to a very lean operation but may also reflect limited capacity to generate consistent cash inflows. Overall, the working capital position is negative and cash flow is likely constrained, posing challenges for ongoing operational funding and debt repayment.

4. Monitoring Points

• Monitor debtor collection periods closely to ensure receivables convert to cash promptly.
• Watch trends in current liabilities to prevent further deterioration of liquidity ratios.
• Track any changes in shareholder funds and net assets for signs of recapitalization or profit generation.
• Review operational activity and management changes that could impact financial control or growth prospects.
• Assess any forthcoming filings or financial disclosures for improved transparency and creditworthiness.