Company Number: 13546251

Analysis Date: 2025-07-20 14:39 UTC

1. Credit Opinion: DECLINE P4C Derby Ltd’s most recent financial year shows a significant deterioration in liquidity and overall financial position. The company moved from healthy net current assets of £13,315 in 2022 to net current liabilities of £21,611 in 2023, indicating serious working capital strain. Total net assets dropped sharply from £35,063 to a marginal £4,416, reflecting accumulated losses or write-downs. The presence of a substantial creditor balance falling due after more than one year (£9,971) adds further long-term obligations. The sharp decline in cash reserves (from £18,763 to £7,885) and trade creditors increasing substantially to £58,537 highlight potential cash flow pressure. Given the weakened balance sheet, negative working capital, and no clear evidence of improving profitability or cash generation, extending credit would pose a high risk.

2. Financial Strength:

• Fixed assets reduced slightly (£21,748 to £16,056), possibly due to disposals or depreciation.
• Current assets declined significantly (£76,308 to £49,618), driven mainly by reductions in both cash and trade debtors.
• Current liabilities increased from £62,993 to £71,229, primarily due to a large increase in trade creditors (£32,024 to £58,537).
• The company now reports net current liabilities of £21,611, indicating a liquidity squeeze.
• The net asset base is very thin at £4,416, with shareholder funds mirroring this.
• The increase in long-term creditors (£9,971) adds to financial commitments. Overall, the financial structure is weak with limited equity buffer and stretched liabilities.

3. Cash Flow Assessment:

• Cash on hand has fallen by more than half year-on-year, to £7,885.
• Debtor balances have also decreased, which may reflect tighter credit control or reduced sales.
• However, the substantial increase in trade creditors suggests the company may be delaying payments to suppliers to conserve cash.
• Negative net current assets indicate working capital is insufficient to cover short-term obligations.
• The director’s loan account has reduced from £18,706 to £79, which could indicate less director funding available.
• Overall, liquidity is constrained and the company may struggle to meet short-term debts without additional financing or operational improvement.

4. Monitoring Points:

• Monthly monitoring of cash flows and creditor days to assess liquidity trends.
• Watch for any overdue creditor payments or supplier disputes that may arise.
• Track debtor collection efficiency and any increase in bad debts.
• Review management actions to improve working capital, such as stock management and cost control.
• Monitor any changes in director funding or new financing arrangements.
• Keep an eye on profitability trends and future forecasts to assess turnaround potential.