P & P DISTRIBUTORS LTD

Executive Summary

P & P DISTRIBUTORS LTD has made progress improving its balance sheet, moving from negative equity to positive shareholders’ funds. However, the company still faces liquidity challenges with negative working capital and significant current liabilities. Credit approval is recommended on a conditional basis with modest limits and monitoring of cash flow and working capital management to mitigate risk.

P & P DISTRIBUTORS LTD - Analysis Report

Company Number: 13143589

Analysis Date: 2025-07-29 20:52 UTC

1. Credit Opinion: CONDITIONAL APPROVAL. P & P DISTRIBUTORS LTD is an active micro-entity operating in freight transport and carrier services. The company has improved its net asset position significantly from negative £17,321 in 2023 to positive £4,280 in 2024, signaling some recovery. However, the company still has negative net current assets (-£19,540) indicating short-term liquidity stress and reliance on longer-term liabilities (£30,526 due after one year). The business appears to be stabilizing but remains vulnerable to working capital pressures. Approval is recommended if credit limits are modest and supported by personal guarantees or additional security, with close monitoring of cash flow and creditor terms.

2. Financial Strength: The balance sheet shows an increase in fixed assets from £36,528 to £55,101, reflecting some investment or asset acquisition. Shareholders’ funds have improved from a deficit of £17,321 to a positive £4,280, indicating a turnaround in equity but still at a modest level. The company carries significant current liabilities (£48,874) exceeding current assets (£21,136), resulting in negative working capital. Long-term creditors have also increased, which may be financing fixed assets. Overall, the company is moving towards financial stability but remains lightly capitalized with tight liquidity.

3. Cash Flow Assessment: Negative net current assets (-£19,540) denote working capital deficiency. The low current assets, mainly cash and debtors, compared to current liabilities suggest potential cash flow constraints. The company’s ability to meet short-term obligations may depend heavily on timely collection of receivables and managing creditor payments. No profit and loss data is available to assess operational cash generation, but improvements in net assets hint at some positive cash flows or capital injections. Liquidity risk remains a primary concern.

4. Monitoring Points:

• Working capital trends: Watch for improvements or deterioration in current assets versus liabilities.
• Debt maturity profile: Manage long-term creditor obligations to avoid refinancing risks.
• Profitability indicators: Obtain future P&L data to assess sustainable earnings and cash flow.
• Director and shareholder support: Monitor for any additional capital injections or guarantees.
• Timely filing of accounts and confirmation statements to ensure compliance and transparency.