PAPERCLIPS DATA SERVICES LTD

Executive Summary

Paperclips Data Services Ltd is a micro-entity with limited financial scale and modest net assets, showing stable but declining liquidity over recent years. The company can service small credit facilities but has constrained financial resilience due to minimal assets and no employees. Conditional credit approval is recommended with cautious exposure limits and close ongoing monitoring of liquidity and working capital metrics.

PAPERCLIPS DATA SERVICES LTD - Analysis Report

Company Number: 12702439

Analysis Date: 2025-07-20 14:49 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Paperclips Data Services Ltd demonstrates modest but stable net asset growth over recent years with no current liabilities as of the latest accounts. However, the business operates at a very small scale (micro entity) with limited assets and no employees, which suggests limited operational complexity and potentially constrained revenue streams. Given the small asset base (£6,634 net assets) and minimal liquidity (£6,634 current assets), the company’s ability to service significant debt or absorb financial shocks is limited. Approval for credit facilities may be considered on a conditional basis, subject to limits aligned with the company’s scale and cash flow, with a focus on short-term, low-risk lending.

2. Financial Strength:
   The balance sheet shows no fixed assets and a decline in current assets from £27,065 in 2021 to £6,634 in 2024, indicating a reduction in available liquid resources over time. Current liabilities have been eliminated in the latest accounts, which improves net current assets to £6,634. Shareholders’ funds have decreased from £25,156 in 2021 to £6,634, signaling retained losses or withdrawals but no reported accumulated losses on the balance sheet. Overall, the company remains solvent but with a very narrow equity base and limited tangible financial strength.

3. Cash Flow Assessment:
   With no employees and minimal operating scale, cash inflows and outflows are likely limited. The reduction in current assets over the last three years may indicate cash consumption or reduced receivables. The absence of current liabilities reduces short-term financial pressure but also reflects minimal trade credit or borrowing. Working capital is positive but small (£6,634), which suggests that liquidity may be tight and the company should be monitored for any cash flow stress, especially if credit is extended.

4. Monitoring Points:

• Watch for trends in current assets to ensure liquidity remains stable or improves.
• Monitor any build-up of current liabilities or overdue payables which could signal cash flow difficulties.
• Assess any changes in business activity or scale that might affect financial performance and creditworthiness.
• Review director and ownership stability, given the company is managed by a single director with no additional staff.
• Request interim financial updates if credit limits increase or if exposure grows to ensure ongoing repayment capacity.