PROCOOLER SUPPLIES LIMITED

Executive Summary

Procooler Supplies Limited is a newly established company with a minimal net asset base and tight working capital position. The company currently relies heavily on director loans to support liquidity, indicating limited external funding capacity. Conditional credit approval is recommended, subject to close monitoring of cash flow performance and operational progress as the company matures.

PROCOOLER SUPPLIES LIMITED - Analysis Report

Company Number: 15514001

Analysis Date: 2025-07-29 20:18 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Procooler Supplies Limited is a newly incorporated private limited company with a financial year ending February 2025. The company shows a small net asset base of £2,620 and marginal net current assets of £413, which indicates very limited financial cushion. The current liabilities of £62,475 nearly offset the current assets of £62,888, reflecting tight working capital. Additionally, the company carries a significant interest-free loan of £50,600 from its directors, which suggests reliance on director funding for liquidity. Given the company’s infancy (less than one year trading) and limited financial history, credit approval should be conditional on close monitoring of cash flows and operational progress before increasing credit limits or loan amounts.

2. Financial Strength
   The balance sheet reveals minimal fixed assets (£2,307) and modest current assets mainly comprising stock (£35,000) and trade debtors (£24,229). The company’s small net asset position (£2,620) and low retained earnings (£620) are typical for a start-up. The presence of director loans (£50,600) classified as creditors underlines dependency on insider funding. No long-term liabilities are reported. The company is exempt from audit under small companies regulations, so financial data is unaudited but prepared under FRS 102. Overall, the financial strength is weak but typical for a start-up; the balance sheet structure raises concerns about resilience against unexpected financial shocks.

3. Cash Flow Assessment
   Cash at bank is low at £3,250, indicating limited liquid resources. The close parity between current assets and current liabilities suggests tight working capital with low operational liquidity. The large director loan provides an important liquidity buffer but is not a sustainable external funding source. The lack of employees and the early stage of operations suggest limited overheads so far, but cash flow generation is unproven. Monitoring trade debtor collections and stock turnover will be critical for cash flow management going forward.

4. Monitoring Points

• Liquidity trends: Watch cash balances and net current assets each period to ensure working capital adequacy.
• Director loans: Assess reliance on related party funding and plans for external financing.
• Trade debtor aging and stock turnover: Monitor to avoid cash flow bottlenecks or inventory obsolescence.
• Profitability and retained earnings growth: As accounts mature, evaluate if the company is generating sustainable profits to build equity.
• Compliance and filings: Ensure timely submission of accounts and confirmation statements given the company’s recent incorporation.