R & A KINCAID LTD

Executive Summary

R & A KINCAID LTD has a modest equity base backed by significant fixed assets but shows a concerning reduction in current assets and persistently high long-term liabilities. While current liabilities are low and working capital remains positive, liquidity is under pressure. Conditional credit approval is recommended with close monitoring of cash flow and debt servicing capacity to ensure ongoing financial stability.

R & A KINCAID LTD - Analysis Report

Company Number: SC724267

Analysis Date: 2025-07-29 20:25 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   R & A KINCAID LTD shows a modest net asset position (£25,475) and owns significant fixed assets (£575,000) consistent over recent years. However, current assets have sharply decreased from £262,940 to £56,511, and long-term liabilities remain high (£600,900). The working capital remains positive but has declined significantly, indicating potential liquidity pressure. Given the company’s micro-entity status and limited operating scale (no employees reported), the ability to service debt depends largely on cash flow from operations and asset utilization. Approval is conditional on monitoring liquidity and ensuring no further deterioration in current asset levels or increases in liabilities.

2. Financial Strength:
   The company’s balance sheet is asset-heavy with fixed assets accounting for the bulk of total assets. Net assets have increased since inception but remain low relative to liabilities. The substantial long-term creditor balance suggests the company has significant debt or financing arrangements, which may constrain financial flexibility. The equity base is small, indicating limited buffer against losses. The decline in current assets year on year is a concern, especially as the company carries no employees, implying limited operational scale or possibly a holding structure.

3. Cash Flow Assessment:
   Current liabilities due within one year are minimal (£5,136), but current assets have decreased drastically, suggesting tight liquidity. The net current assets remain positive (£51,375) but reduced by approximately 80% from the prior year. This signals potential cash flow constraints in meeting short-term obligations and operational expenses. Without detailed cash flow statements, the large reduction in current assets (likely cash or receivables) is a red flag requiring close scrutiny. The absence of employees may reduce payroll cash outflows but also raises questions about operational activity generating cash.

4. Monitoring Points:

• Liquidity ratios and movements in current assets and liabilities, especially cash balances
• Servicing ability of long-term liabilities and any refinancing risk
• Operational cash flow generation given no reported employees
• Changes in fixed asset utilization or disposals to support liquidity
• Any new debt or capital injections impacting leverage and solvency