PIXEL DEVELOPMENT SYSTEMS LTD

Executive Summary

PIXEL DEVELOPMENT SYSTEMS LTD demonstrates a stable but modest financial position typical of an early-stage micro-entity software developer. The company has improved its net current assets and reduced liabilities, indicating sound financial stewardship, but its small scale limits its capacity to service significant debt. Credit approval is recommended with conditions focused on ongoing liquidity monitoring and business growth.

PIXEL DEVELOPMENT SYSTEMS LTD - Analysis Report

Company Number: 14226956

Analysis Date: 2025-07-20 11:42 UTC

1. Credit Opinion: APPROVE with caution PIXEL DEVELOPMENT SYSTEMS LTD is a recently incorporated micro-entity engaged in software development. The company shows a positive net asset position of £10,251 as of July 2024, an improvement from £8,789 the prior year. The increase in net current assets and shareholders' funds indicates modest growth and sound financial stewardship. The company has no long-term liabilities, which reduces financial risk. However, as a micro-entity with limited asset base and low absolute working capital, its debt-servicing capacity is constrained. Given the small scale and early stage, credit approval should be conditional on maintaining positive cash flows and monitoring for any increases in liabilities.

2. Financial Strength: The balance sheet shows no fixed assets, which is typical for a software development business with intangible assets not capitalised here. Current assets decreased from £23,891 to £14,278, but current liabilities also reduced significantly from £15,102 to £4,027, resulting in improved net current assets from £8,789 to £10,251. The company is fully equity-funded with shareholders' funds equalling net assets, indicating no external debt. The increase in net assets suggests retained earnings or capital injections. Overall, the financial position is stable but limited in scale.

3. Cash Flow Assessment: Current assets primarily represent cash or equivalents and receivables, while current liabilities are short-term payables. The net current asset position of £10,251 suggests adequate short-term liquidity to meet immediate obligations. The reduction in current liabilities by nearly £11,000 year-on-year is a positive sign of improving working capital management. The company employs two staff on average, indicating controlled overheads. However, the absolute liquidity level remains modest, so cash flow should be closely monitored especially if credit is extended.

4. Monitoring Points:

• Monitor cash balances and current liabilities trends to ensure liquidity remains adequate.
• Watch for any increase in external borrowings or trade creditors that might strain working capital.
• Review annual accounts for revenue growth and profitability indicators to confirm business viability.
• Track director changes and any related party transactions given the recent director resignation.
• Confirm timely filing of accounts and confirmation statements to avoid regulatory risks.