NUNEATON OLD EDWARDIANS RFC LTD

Executive Summary

Nuneaton Old Edwardians RFC Ltd demonstrates a solid asset base and positive equity for a micro-entity but currently faces short-term liquidity constraints with net current liabilities exceeding current assets. The company is in an early growth phase with limited trading history, requiring close monitoring of cash flow and working capital improvements before extending significant credit. Conditional approval is recommended, contingent on satisfactory demonstration of improved liquidity and operational cash generation.

NUNEATON OLD EDWARDIANS RFC LTD - Analysis Report

Company Number: 13518721

Analysis Date: 2025-07-20 13:32 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Nuneaton Old Edwardians RFC Ltd is a micro-entity operating in the sports club sector. The company shows a positive net asset position of £162,818 as of April 2024, indicating equity backing. However, current liabilities (£58,109) exceed current assets (£20,059), resulting in a net current liability position of £38,050. This suggests potential short-term liquidity pressure. The company has no trading history prior to 2022 and only recently reported positive equity, so its financial trajectory is early-stage and somewhat uncertain. Approval is conditional on ongoing monitoring of cash flow and liquidity, with a recommendation for the client to demonstrate improved working capital management before extending significant credit.

2. Financial Strength:
   The balance sheet shows fixed assets of £200,868, which is a solid asset base for a micro-entity, likely representing club facilities or equipment. Shareholders funds (equity) stand at £162,818, reflecting accumulated reserves or retained earnings. The net current liabilities of £38,050 are a concern and indicate short-term obligations exceed liquid assets, which may impact operational flexibility. The absence of an income statement limits insight into profitability or recurring revenue streams. Overall, the company’s financial strength is moderate with strong asset backing but constrained liquidity.

3. Cash Flow Assessment:
   Current assets of £20,059 are insufficient to cover current liabilities of £58,109, indicating a working capital deficiency. This suggests the company may face challenges meeting immediate obligations without additional cash inflows or financing. The average number of employees is low (4), which may help control operating costs, but no cash flow statement or income details are available to confirm operational cash generation. The company should focus on enhancing liquidity either through improved receivables collection, cost control, or external funding.

4. Monitoring Points:

• Liquidity and working capital ratios: Monitor improvement in current ratio and net current assets.
• Cash flow generation: Obtain cash flow statements or management accounts to assess operational cash inflows.
• Profitability trends: Review future filings for income and expenditure data to confirm sustainable earnings.
• Debtor and creditor aging: Track payment patterns to ensure short-term obligations can be met timely.
• Director stability and governance: The board includes several retired persons and professionals; ongoing oversight of management quality is advised.