PADDABURN LTD

Executive Summary

Paddaburn Ltd is a very young company showing negative net assets and a significant working capital deficit. Its minimal cash resources and current liabilities exceeding current assets pose liquidity risks. Without evidence of profitability or capital support, the company is not currently creditworthy for new lending. Close monitoring of liquidity, debtor collection, and financial performance is essential going forward.

PADDABURN LTD - Analysis Report

Company Number: 14519075

Analysis Date: 2025-07-29 16:16 UTC

1. Credit Opinion: DECLINE
   Paddaburn Ltd is a recently incorporated company (Dec 2022) operating in "Other service activities not elsewhere classified" with very limited trading history. The latest filed accounts for the period ending Dec 2023 reveal net liabilities of £1,887 and a significant working capital deficit of £8,953. Current liabilities (£15,386) substantially exceed current assets (£6,433), indicating liquidity concerns. The company’s cash position is very low (£156). The negative shareholders’ funds and absence of profit and loss data (not filed) prevent assessment of profitability or cash generation. These factors suggest an inability to service potential debt without external support or capital injection. Given the financial weakness, lack of trading history, and negative net assets, approval without significant conditions or guarantees is not recommended.

2. Financial Strength:
   The balance sheet shows tangible fixed assets of £7,066, primarily plant and equipment, but these do not cover current liabilities. Debtors (£6,277) form the bulk of current assets, implying the company is owed money but may face collection risk. The net current asset deficit (-£8,953) and overall net liabilities (-£1,887) reflect weak financial strength. The company’s equity is negative, driven by accumulated losses or initial setup costs exceeding capital. No long-term liabilities or borrowings are disclosed, but the short-term obligations are high relative to assets.

3. Cash Flow Assessment:
   Cash at bank is minimal (£156), indicating limited liquidity. The large current liabilities relative to current assets suggest potential cash flow strain, with insufficient working capital to cover short-term obligations. Debtor balances may provide some inflow but depend on timely collection. Without profit and loss figures, it's unclear if operations generate positive cash flow. The company’s negative working capital and very low cash balance raise concerns about its ability to meet immediate debt repayments or unexpected costs.

4. Monitoring Points:

• Improvement in net current assets and overall net asset position
• Timely collection of debtors to support liquidity
• Filing of profit and loss accounts to assess operational cash generation and profitability
• Any capital injections or external financing to strengthen equity and working capital
• Director actions to manage creditors and control costs
• Ongoing trading performance and turnover growth