Company Number: SC725030

Analysis Date: 2025-07-20 15:17 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Realise Earth Ltd is a small, recently incorporated private limited company operating in management consultancy activities. The company shows modest but improving net current assets and shareholder funds, indicating a stable financial base so far. However, loans from directors (£6,971) comprise a significant portion of current liabilities and are repayable on demand without interest, which poses liquidity risk. The business has only one employee and limited operating history, which restricts credit visibility. Approval is recommended with conditions: ongoing monitoring of cash flow and director loans, and limits on credit exposure until the company demonstrates consistent positive cash generation and debt servicing capacity.

2. Financial Strength:
   The balance sheet as of 31 March 2024 shows total assets less current liabilities of £2,706, up from £2,297 the prior year. Net current assets improved from £895 to £1,584, reflecting better working capital management. Fixed assets are negligible (£1,122), consistent with a consultancy business model requiring minimal capital investment. Shareholders’ funds equate to net assets of £2,706, indicating a small but positive equity position. The company is classified as Micro, with low turnover thresholds. Overall, the financial position is modest but stable, with no significant leverage aside from director loans included in current liabilities.

3. Cash Flow Assessment:
   Current assets (£9,755) comfortably exceed current liabilities (£8,171), providing a current ratio of approximately 1.19, which is acceptable for a micro entity. However, a large portion of current liabilities consists of director advances (£6,971) repayable on demand, potentially creating liquidity pressure if the director calls for repayment. The company’s cash flow generation capacity is unclear due to limited disclosures and no profit/loss data available. The presence of only one employee and minimal fixed assets suggests low overheads, but the company’s ability to generate sustainable cash inflows to service external debt or fund growth is unproven.

4. Monitoring Points:

• Track changes in director loan balances and any repayments or additional advances.
• Monitor upcoming accounts and cash flow statements for evidence of positive operating cash flow.
• Watch for any increase in external credit facilities or trade payables that may strain liquidity.
• Assess any changes in shareholder equity due to losses or capital injections.
• Review client contracts, turnover, and employee numbers to gauge business growth and resilience.