PROJECT 04 LIMITED

Executive Summary

PROJECT 04 LIMITED shows a weak financial position with negative net assets and high leverage against fixed assets. Liquidity constraints and minimal working capital raise concerns about its ability to service debt or withstand financial stress. Credit approval is not recommended without substantial additional security or evidence of improved cash flows.

PROJECT 04 LIMITED - Analysis Report

Company Number: 14148006

Analysis Date: 2025-07-29 13:54 UTC

1. Credit Opinion: DECLINE
   PROJECT 04 LIMITED’s financial profile raises significant concerns from a credit perspective. The company shows a negative net asset position (£-2,141) as of June 2024, indicating that liabilities slightly exceed assets. The presence of long-term creditors (£732,450) matching the fixed assets suggests the company is highly leveraged with very limited working capital. Such a capital structure implies elevated financial risk and a fragile ability to service debt or meet short-term obligations without additional capital injection. Furthermore, the company has no employees and minimal current assets (£3,961), limiting operational resilience and cash generation capacity. The absence of audit or detailed financial disclosures further reduces transparency. Given these factors, extending credit facilities would be imprudent without strong additional guarantees or a robust business plan showing imminent cash flow improvements.

2. Financial Strength:
   The balance sheet is weak and deteriorating. In 2023, net assets were positive (£1,461), but by 2024 they turned negative (£-2,141). This is primarily due to the recognition of fixed assets (£732,450) financed by equal long-term liabilities, which do not appear to generate corresponding current asset growth or working capital. Current liabilities exceed current assets, creating a net current liability position of £-2,141, which signals liquidity stress. Shareholders’ funds are minimal and negative, reflecting accumulated losses or capital deficits. The company’s micro-entity status limits filing detail, but the financials suggest an undercapitalised business with weak equity buffer and high leverage.

3. Cash Flow Assessment:
   Liquidity is constrained, with current assets of only £3,961 largely insufficient to cover short-term liabilities. Net current liabilities mean the company lacks the working capital to cover immediate debts without external funding or asset sales. The lack of employees and minimal current assets imply limited operational cash inflows. No evidence of cash reserves or receivables is visible. Without positive cash flow generation or refinancing, the company may face difficulty in meeting creditor demands or funding ongoing costs, further increasing credit risk.

4. Monitoring Points:

• Track quarterly cash flow statements and bank balances to assess liquidity trends.
• Monitor any changes in long-term debt structure or asset disposals that impact leverage.
• Review management’s plan to improve working capital or equity base.
• Watch for timely filing of accounts and returns to ensure compliance and transparency.
• Monitor any director changes or governance developments that might affect financial stewardship.