PI'CUBIC LTD

Executive Summary

PI'CUBIC LTD shows a weak financial profile with negative net assets, significant liquidity shortfalls, and heavy reliance on director loans. Despite being an active micro-entity, the company’s current financial structure suggests limited capacity to manage additional credit risk. Without operational cash flow improvement or external capital support, credit approval is not recommended at this time.

PI'CUBIC LTD - Analysis Report

Company Number: 13248542

Analysis Date: 2025-07-29 15:13 UTC

1. Credit Opinion: DECLINE
   PI'CUBIC LTD demonstrates a persistently weak financial position with net liabilities increasing from -£13,890 in 2021 to -£35,170 in 2024. The company’s current liabilities consistently exceed current assets by over £100,000, indicating negative working capital and liquidity challenges. The director’s loan of approximately £167,000 is a key source of funding, but reliance on director support rather than operational cash generation raises concerns about sustainability and repayment capacity. The company operates in the real estate letting sector, but no depreciation is charged on investment property, which may overstate asset values. Overall, the company's ability to service external debt or new credit facilities is limited without significant improvement or external capital injection.

2. Financial Strength:
   The balance sheet shows fixed assets around £235,000, mainly investment properties, but net current liabilities exceed £100,000 annually. Total creditors after one year stand at £166,005, consistent over the last three years, reflecting long-term loans likely from the director. Negative net assets at -£35,170 confirm an insolvent equity position. The company’s micro-entity classification and no employees suggest a very small operation with limited scale. The financial trajectory over four years shows deterioration in net assets and persistent liquidity deficits, indicating weakening financial strength.

3. Cash Flow Assessment:
   Current liabilities surpass current assets by a substantial margin, indicating poor short-term liquidity and potential difficulty meeting immediate obligations without further director advances. The absence of depreciation expense inflates fixed assets but does not improve cash flow. No indication of operating cash flows or profitability is provided, but recurring reliance on director loans signals cash flow dependency on related party financing rather than operational income. This poses risk for external creditors as the company may struggle to generate independent cash flows for debt servicing.

4. Monitoring Points:

• Track changes in working capital and net current assets to assess liquidity improvements.
• Monitor any changes in director loan balances and their terms to understand funding stability.
• Watch for filing of audited accounts or evidence of operational cash flows to support creditworthiness.
• Observe any depreciation policy changes or asset revaluations that may impact asset quality.
• Review any increase in trade creditors or overdue payments as signs of financial stress.