POP SOLUTION LTD

Executive Summary

Pop Solution Ltd shows a weakening financial position with reduced net assets and increased long-term liabilities, indicating increased credit risk. While liquidity remains positive, the diminished equity base and reliance on creditor funding suggest cautious credit exposure with conditions and ongoing monitoring. Approval is possible for limited facilities subject to stringent oversight of financial performance and borrowing levels.

POP SOLUTION LTD - Analysis Report

Company Number: 13029363

Analysis Date: 2025-07-20 13:29 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Pop Solution Ltd is an active micro private limited company with a modest asset base and limited turnover implied by its micro classification. The financials reveal a significant deterioration in net assets from £16,814 in 2023 to £2,708 in 2024, driven largely by the introduction of long-term creditor liabilities (£6,823) and a reduction in current assets and net current assets. This weakening equity position and increased leverage suggest elevated risk, warranting a cautious approach to credit extension. Approval may be considered if loan amounts and terms are modest, with conditions such as periodic financial reporting and limits on further borrowing to monitor ongoing financial health.

2. Financial Strength:
   The company’s total assets less current liabilities dropped from £16,814 in 2023 to £9,531 in 2024. The introduction of long-term liabilities (£6,823) has reduced net assets substantially, indicating increased gearing. Fixed assets are minimal (£5,599) and current assets have declined, impacting liquidity buffers. Shareholders’ funds have fallen sharply to £2,708, reflecting a weakened balance sheet base. The company remains solvent but with limited financial strength and reduced equity cushion.

3. Cash Flow Assessment:
   Current assets (£15,957) still exceed current liabilities (£12,025), yielding positive net current assets of £3,932, which is a reasonable working capital position. However, this is down from £9,815 in the prior year, indicating tightening liquidity. The presence of significant long-term creditors suggests reliance on external funding which may pressure future cash flows. No cash flow statements are provided, but the balance sheet trends suggest the company should carefully manage cash to meet obligations.

4. Monitoring Points:

• Track net asset position and equity movements in subsequent accounts to assess if the decline stabilizes or worsens.
• Monitor current ratio and working capital trends to ensure liquidity remains positive and sufficient.
• Review any new borrowing or changes in creditor terms that could further leverage the balance sheet.
• Watch for any late filings or changes in director appointments which may signal governance or operational issues.
• Regular updates on profitability or cash flow through management accounts would help track repayment capacity.