PUZZLE TREE ACADEMY LTD

Executive Summary

Puzzle Tree Academy Ltd is in a weak financial position with negative equity and worsening liquidity, raising serious concerns over its ability to meet financial commitments. Due to significant net current liabilities and limited cash resources, extending credit is not advisable at this stage. Close monitoring of liquidity improvements and operational progress is recommended before reconsidering credit facilities.

PUZZLE TREE ACADEMY LTD - Analysis Report

Company Number: 13644882

Analysis Date: 2025-07-20 14:29 UTC

1. Credit Opinion: DECLINE
   Puzzle Tree Academy Ltd demonstrates significant financial distress, evidenced by persistent and increasing net liabilities and negative working capital. The company’s net current liabilities have grown from £1,568 in 2022 to £4,048 in 2024, indicating worsening short-term liquidity. The shareholder funds are negative and deteriorating, reflecting accumulated losses and insufficient equity support. Given these factors, the ability to meet debt obligations and service new credit lines is questionable. There is no indication of profitability or cash flow improvement, and the company operates with only one employee, suggesting limited operational scale and resilience.

2. Financial Strength:
   The balance sheet shows very weak financial health. Tangible fixed assets are minimal (£96), and current assets are negligible (£491), with cash on hand at £423 as of March 2024. Debtors have sharply decreased from £1,370 in 2022 to £68 in 2024, which may indicate declining sales or collection issues. Current liabilities have increased substantially to £4,539, creating significant negative net current assets and total net liabilities of nearly £4,000. The company’s equity position is in substantial deficit, indicating persistent losses without recapitalization.

3. Cash Flow Assessment:
   Cash balances remain low with £423 at year-end, insufficient to cover current liabilities of £4,539. The negative net current assets highlight poor liquidity and working capital management. The absence of detailed profit and loss information constrains full cash flow analysis, but the deterioration in creditors and debtors suggests cash flow pressures. The company’s solvency risk is elevated, given liabilities exceed assets and the firm has limited cash buffers.

4. Monitoring Points:

• Improvement in net current assets and reduction of creditors to manageable levels.
• Evidence of sustained positive cash flows and rebuilding of cash reserves.
• Enhanced debtor collection and turnover growth to support liquidity.
• Any capital injections or restructuring to restore shareholder equity.
• Operational scale and employee headcount increases indicating business growth and resilience.
• Updated management accounts or forecast demonstrating turnaround plans.