Company Number: 13124804

Analysis Date: 2025-07-20 13:00 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Peabody Studio Ltd is a micro private limited company operating in online retail (SIC 47910), with a very small capital base (£100 share capital) and limited fixed assets. The company remains active and compliant with filing deadlines. However, its net assets have declined significantly from £15,000 in 2021 to £1,313 in 2024, and net current assets are marginal but positive (£873 in 2024). This indicates limited financial cushioning. Given the small scale, tight working capital, and lack of profitability data, approval is conditional on continued monitoring of liquidity and financial performance. The director, Mr. Thomas Seager, holds full control and has maintained compliance, which is positive for governance.

2. Financial Strength:
   The balance sheet shows a shrinking asset base and equity over three years, with fixed assets decreasing from £2,052 (2021) to £340 (2024). Current assets are modest (£10,918 in 2024) and just cover current liabilities (£11,440 in 2024), resulting in a slight net current asset position. Shareholders’ funds have fallen from £15,000 to £1,313, indicating erosion of reserves or retained profits. The company operates with minimal capital and limited tangible asset backing. This suggests low financial resilience, typical for micro enterprises, but no immediate solvency concerns given positive net assets.

3. Cash Flow Assessment:
   Current assets primarily include cash and receivables, but current liabilities are nearly equal, leaving working capital tight. The modest net current assets (around £800) indicate limited liquidity buffer to absorb shocks or meet unexpected demands. The business employs only 2 staff on average, keeping overheads low. Without detailed cash flow statements, it is unclear how stable the cash inflows are, but turnover around £105k in recent years suggests modest revenue generation. The company’s ability to service short-term debts depends on maintaining steady sales and controlling payables.

4. Monitoring Points:

• Trends in net current assets and liquidity ratios to ensure ongoing ability to meet short-term obligations
• Profitability and cash flow generation to rebuild reserves and strengthen equity base
• Receivables aging and inventory turnover given the retail nature of the business
• Director conduct and governance given full control by a single individual
• Compliance with filing deadlines (currently good) and any material changes in business scale or credit exposures