OUTCOMEPATH LTD

Executive Summary

Outcomepath Ltd is a newly formed IT consultancy with a positive short-term liquidity position but negative net assets driven by director loan funding. While able to meet immediate liabilities, the company’s lack of trading history and reliance on director financing warrant conditional credit approval with careful ongoing monitoring of cash flow, profitability, and loan repayments.

OUTCOMEPATH LTD - Analysis Report

Company Number: 15163799

Analysis Date: 2025-07-20 18:45 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Outcomepath Ltd is a recently incorporated IT consultancy company with limited trading history (less than one year). While the company shows positive net current assets of £30,463 as of 30 September 2024, it has a significant negative net asset position (£-209,537) due to director loans totaling £276,000 (£240,000 long-term and £36,000 short-term). The reliance on director loans indicates external funding support but raises concerns on independent financial resilience. The company currently meets short-term obligations but has yet to demonstrate sustainable profitability or cash flow generation. Credit approval can be considered with conditions—such as monitoring cash flow trends, profitability, and repayment of director loans—and possibly requiring personal guarantees or collateral given the negative equity.

2. Financial Strength:
   The balance sheet reflects a start-up phase typical for a new small company. Current assets of £244,751 (including £148,646 cash) exceed current liabilities of £214,288, resulting in positive net working capital. However, the total liabilities include substantial director loans classified as long-term (£240,000) that contribute to an overall net liabilities position of £209,537. Shareholders’ funds are negative, reflecting accumulated losses or initial investment structure. Fixed assets are not reported, indicating the company’s main assets are cash and receivables. The financial strength is weak due to negative equity, but liquidity is currently adequate.

3. Cash Flow Assessment:
   The company holds a healthy cash balance (£148,646) relative to liabilities due within one year (£214,288), supported by trade debtors (£84,540) and accrued income (£11,565). Net current assets are positive at £30,463, suggesting the company can cover short-term obligations. However, the presence of significant deferred income (£36,300) and director loans implies some cash inflows are not yet earned or are financing-related. Cash flow from operations is not explicitly detailed, but the directors’ notes affirm going concern status based on cash flow forecasts. Close monitoring of operating cash generation and reduction of reliance on director loans will be critical.

4. Monitoring Points:

• Profitability and turnover growth in subsequent accounting periods to demonstrate sustainable business operations.
• Repayment schedule and terms of director loans to assess long-term solvency and risk concentration.
• Working capital dynamics, especially debtor collection periods and creditor payment terms.
• Cash flow from operating activities versus financing activities to verify dependency on external funding.
• Any changes in share capital or equity injections improving net asset position.