Company Number: 13557199

Analysis Date: 2025-07-20 15:28 UTC

1. Credit Opinion: DECLINE
   Perry's Paintwork Supplies Ltd exhibits significant financial distress with persistent and worsening negative net assets (£-30,699 at 31 March 2024) and a substantial working capital deficit (£-31,212). The company’s current liabilities have nearly doubled in one year, largely driven by an increase in other creditors and director loan accounts. The director’s loan of £22,506 is interest-free and repayable on demand but creates reliance on informal funding. There is no audit, and the director notes material uncertainties regarding going concern, indicating elevated credit risk. The company’s inability to cover short-term obligations from current assets raises concerns about payment capability.

2. Financial Strength:
   The balance sheet shows very weak financial health. Fixed assets are minimal (£633), and current liabilities (£48,527) greatly exceed current assets (£17,315). Negative shareholders’ funds and net liabilities indicate accumulated losses and erosion of equity. The sharp increase in other creditors and director loans suggests dependency on external and related-party financing, which is often less stable. The small asset base and negative equity position limit the company’s resilience and financial flexibility.

3. Cash Flow Assessment:
   Cash at bank is low (£3,936) relative to current liabilities, with working capital deeply negative. Debtors are modest (£5,849) but insufficient to cover immediate liabilities. The company’s cash flow position is precarious, increasing the risk of liquidity shortfalls. The reliance on director loans to fund operations further highlights cash constraints. Operating lease commitments of £10,400 add to fixed overheads. Overall, liquidity risk is high, and the firm likely requires ongoing financial support to meet obligations.

4. Monitoring Points:

• Track changes in current liabilities, especially other creditors and director loans, to assess reliance on informal funding.
• Monitor cash balances and debtor collections closely for liquidity improvements or deterioration.
• Review future trading results and profitability to evaluate potential recovery of net asset value.
• Watch for timely filing of accounts and confirmation statements as a signal of management capability and compliance.
• Assess any changes in going concern statements or director commentary in subsequent filings.