OPTICAL SENSING LTD

Executive Summary

Optical Sensing Ltd exhibits significant financial weakness with negative net assets and a large working capital deficit, indicating strained liquidity and an inability to meet short-term obligations. The company’s financial trajectory is declining, reflecting operational or management challenges. Given the weak balance sheet and cash flow position, extending credit is not advisable at this stage without substantial mitigation measures.

OPTICAL SENSING LTD - Analysis Report

Company Number: 13442789

Analysis Date: 2025-07-20 15:09 UTC

1. Credit Opinion: DECLINE
   Optical Sensing Ltd displays significant financial distress with net liabilities of £9,548 as of April 2024, a sharp deterioration from £741 in the prior year. The company’s current liabilities have quintupled to £15,000 while current assets remain minimal at £4,936, resulting in a negative working capital position of over £10,000. This indicates an inability to meet short-term obligations from available liquid resources. The company's losses have eroded equity substantially within a short period, signaling weak financial stewardship or operational challenges. Given these factors, the company currently lacks the financial strength and resilience needed to support new credit facilities.

2. Financial Strength:
   The balance sheet is notably weak. Fixed assets are negligible (£516), and the company relies heavily on short-term liabilities which have increased markedly. Shareholders’ funds are deeply negative, reflecting accumulated losses and an impaired capital base. The company’s micro-entity status and zero employees suggest a very small operation with limited asset backing. The trend over recent years shows declining net assets from positive £566 in 2021 to deeply negative by 2024, highlighting worsening financial position and limited buffer against downturns.

3. Cash Flow Assessment:
   The negative net current assets position (-£10,064) signals liquidity stress and potential cash flow difficulties. Current liabilities of £15,000 due within one year outweigh current assets by a wide margin, indicating insufficient working capital to cover immediate debts. No employees and low fixed assets imply limited operational scale, possibly impacting revenue generation and cash inflows. Without evidence of strong cash generation or external capital injections, the company’s ability to service debt or meet trade payables is questionable.

4. Monitoring Points:

• Track changes in current liabilities and working capital to assess liquidity trends.
• Monitor net asset position and any capital injections or restructuring efforts.
• Review upcoming filing deadlines and any late filing warnings that could indicate operational issues.
• Watch for director changes or PSC updates that might signal governance shifts.
• Observe any improvements in profitability or cash flow in future accounts to gauge operational recovery.