PAUBON LTD

Executive Summary

Paubon Ltd is a micro-entity with a positive but declining financial position and limited operating history. The company currently maintains sufficient working capital and net assets to service short-term obligations, but the downward trend in financial strength warrants cautious credit extension with conditions. Close monitoring of liquidity and cash flow will be essential to manage credit risk going forward.

PAUBON LTD - Analysis Report

Company Number: 13440550

Analysis Date: 2025-07-20 16:27 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Paubon Ltd is a very small, micro-entity company with limited financial history, incorporated recently in 2021. The company shows positive net assets and working capital, indicating current ability to meet short-term obligations. However, there is a noticeable decline in net assets and current assets from 2023 to 2024, suggesting some weakening in financial position. The company’s activity is in investigation and IT consultancy, which can have variable cash flows. The director is also the sole shareholder with full control, which may limit external oversight. Credit facilities might be extended with conditions such as regular monitoring of cash flow and receivables, and possibly personal guarantees given the small scale and limited financial depth.

2. Financial Strength:

• Net assets fell from £31,823 (2023) to £21,995 (2024), a reduction of nearly 31%, indicating a decline in retained earnings or accumulated reserves.
• Fixed assets are minimal (£1,200), reflecting limited investment in long-term assets.
• Current assets declined from £25,691 to £19,142, while current liabilities reduced from £10,308 to £4,168, improving net current assets ratio from £15,383 (approx.) to £14,974, but reported net current assets are given as £21,695 (likely including prepayments).
• Share capital is nominal (£10), so financial strength is largely dependent on accumulated reserves and ongoing profitability.
  Overall, the balance sheet is positive but fragile, with a shrinking asset base that requires attention.

3. Cash Flow Assessment:

• The company reports no employees, which suggests low overheads.
• Current assets include prepayments and accrued income (£6,721 in 2024, down from £16,836 in 2023), which may impact liquidity.
• Reduction in current liabilities improves liquidity position, but the decline in current assets is a negative sign.
• Director advances are minimal and in credit to the company, which indicates some internal funding support.
• No audit conducted and accounts prepared under micro-entity provisions limit transparency on cash flow details.
  Liquidity appears adequate at present but requires close scrutiny of cash conversion cycles and receivables collection.

4. Monitoring Points:

• Watch the trajectory of net assets and working capital for further decline.
• Monitor cash flow statements closely when available, especially operating cash flows.
• Review director’s ongoing financial support or withdrawals.
• Keep an eye on accounts filing timeliness and any changes in business activity or scale.
• Observe any new borrowings or credit facility usage and repayment trends.
• Monitor for any external changes affecting the investigation and IT consultancy sectors impacting revenue.