RE 5 LIMITED

Executive Summary

RE 5 Limited is currently in a weak financial position with negative net assets and a significant working capital deficit, indicating high credit risk. The company’s liquidity constraints and deteriorating balance sheet suggest it is not in a position to service new or existing credit facilities reliably. Close monitoring of cash flows and management interventions is advised before any credit approval.

RE 5 LIMITED - Analysis Report

Company Number: 14323767

Analysis Date: 2025-07-29 18:28 UTC

1. Credit Opinion: DECLINE
   RE 5 Limited demonstrates significant financial distress. The company has reported net liabilities of £7,758 as of the latest period, worsening from a net liability position of £587 the previous year. Current liabilities exceed current assets by £8,720, indicating a severe working capital deficit. The negative net current assets suggest the company is unable to cover short-term obligations from liquid assets, raising concerns about its ability to service debt or sustain credit facilities without external support. Given the micro-entity size and the negative financial trends, the credit risk is high, and approval for additional credit facilities is not recommended at this time.

2. Financial Strength:
   The balance sheet shows weak financial health. Fixed assets are minimal (£962), and current liabilities have increased sharply to £12,533 from £1,818 the prior year, while current assets remain low at £3,813. The company’s net asset position is negative and deteriorating, reflecting accumulated losses or possibly shareholder withdrawals. Shareholders’ funds are negative (£7,758), indicating that liabilities exceed total assets. This points to an erosion of equity and limits the company’s borrowing capacity or ability to absorb financial shocks.

3. Cash Flow Assessment:
   Liquidity is a major concern. The company’s working capital deficit of £8,720 means it lacks sufficient short-term resources to meet immediate obligations. The absence of positive net current assets suggests strained cash flow management and potential reliance on external funding or director loans (noted credit balance of £10,426 to the director). Operating cash flows are likely negative or insufficient to cover payables, increasing the risk of default or late payments.

4. Monitoring Points:

• Monitor quarterly cash flow statements for signs of improved liquidity or further deterioration.
• Watch for any director loans or external financing to cover working capital shortfalls.
• Review subsequent filings for improvement in net assets and current asset coverage.
• Observe any changes in payment patterns or overdue liabilities.
• Assess management actions to improve financial stability or restructure debt.