Company Number: 14075930

Analysis Date: 2025-07-29 20:06 UTC

1. Credit Opinion: APPROVE with conditions
   Persian Aroma Ltd is a recently incorporated small private limited company operating in the licensed restaurant sector. The company shows steady growth with improving net assets and retained earnings. It maintains a strong cash position and positive working capital, which supports its ability to meet short-term liabilities and service debt. The director has significant control and involvement, and there are no adverse flags such as overdue filings or director disqualifications. However, the company carries a substantial directors’ loan account balance, which poses some risk of related party exposure. Approval is recommended subject to monitoring the director loan balance and ensuring continued positive cash flows.

2. Financial Strength
   The balance sheet shows a healthy increase in net assets from £74,795 in 2023 to £184,138 in 2024, driven by retained earnings growth of £109,343 during the year. Fixed assets have increased moderately, reflecting investment in tangible assets, and stock levels remain stable. Current assets of £368,868 comfortably cover current liabilities of £106,230, yielding a strong current ratio (~3.5x) and solid net current assets (£262,638). The presence of deferred tax provision (£2,853) is noted but is not significant relative to overall net assets. The company is classified as a small entity with no audit requirement, which limits external assurance.

3. Cash Flow Assessment
   Cash at bank has increased significantly to £336,133, indicating strong liquidity. Trade debtors are relatively low (£4,837), suggesting efficient debtor management. The company’s working capital position is robust, supporting operational liquidity and short-term obligations. However, the directors’ loan account of £87,059 is a non-bank creditor and may represent a contingent liability if called upon. Monitoring cash flow trends and the director loan account movements will be essential to assess ongoing liquidity risk.

4. Monitoring Points

• Directors’ loan account balance and terms: Ensure no sudden calls or repayments that could strain liquidity.
• Cash flow sustainability: Confirm sales and cash inflows remain stable or improve, especially given the licensed restaurant sector’s sensitivity to economic cycles.
• Stock and debtor turnover: Monitor for any build-up that could impair working capital.
• Compliance with filing deadlines and governance: Maintain timely submissions and review director conduct.
• Impact of economic factors such as inflation or regulatory changes affecting the hospitality industry.