NUTRAMAX LTD

Executive Summary

Nutramax Ltd is currently in a financially distressed position with negative net assets and poor working capital. The company’s liquidity challenges and lack of profitability undermine its capacity to service debt, leading to a credit decline recommendation. Close monitoring of cash flow and operational metrics is essential if the company’s credit risk profile is to improve.

NUTRAMAX LTD - Analysis Report

Company Number: 13951454

Analysis Date: 2025-07-20 11:16 UTC

1. Credit Opinion: DECLINE
   NUTRAMAX LTD demonstrates a weak financial position with net liabilities reported for the past two years. The company has negative net current assets (working capital) of approximately £12,920 as of March 2024, indicating potential liquidity issues and inability to cover short-term obligations fully. The consistent negative net assets (shareholder deficit of £5,783) suggest erosion of equity and financial distress. As a micro-entity in the unlicensed restaurant and café sector—a generally competitive and low-margin industry—this financial profile raises concerns about its ability to service new credit facilities. No signs of profitability or positive cash flows are evident to mitigate credit risk. Therefore, credit approval is not recommended without substantial improvement or additional security.

2. Financial Strength:
   The balance sheet reveals a decline in fixed assets from £9,045 to £7,137 and a significant reduction in current assets (£5,691 to £3,426). Current liabilities remain high at £16,346, maintaining a negative working capital position. The company has a shareholders’ deficit increasing from £3,126 to £5,783, indicating accumulated losses or withdrawals exceeding capital infusion. The decline in employee count from 6 to 4 may reflect cost-cutting but also reduced operational capacity. Overall, the financial strength is poor, with insufficient asset coverage and no buffer against operational stresses.

3. Cash Flow Assessment:
   While detailed cash flow statements are unavailable, the net current asset deficit suggests a chronic liquidity shortfall. The business likely struggles to generate sufficient cash inflows to meet short-term liabilities, risking delayed payments to suppliers or creditors. The reduction in current assets, coupled with stable high current liabilities, implies tight working capital management and potential reliance on external financing or director loans. Without improvement in cash conversion cycles or capital injection, liquidity risk remains high.

4. Monitoring Points:

• Quarterly review of cash flow statements to detect liquidity improvement or deterioration.
• Monitoring of debtor and creditor days to assess working capital efficiency.
• Watch for any new capital injections or restructuring plans that could improve equity levels.
• Regular update on profitability metrics and turnover trends to understand operating performance.
• Director conduct and any related party transactions given the significant control held by two directors.