REFRESH MULTIMEDIA LTD

Executive Summary

Refresh Multimedia Ltd has shown steady improvement in net assets and liquidity since incorporation, with positive working capital and no long-term debt. Despite growth in liabilities and inventory, cash reserves have strengthened, supporting short-term obligations. Credit facilities may be conditionally approved, subject to ongoing monitoring of liquidity, creditor management, and operational performance due to the company's small scale and limited history.

REFRESH MULTIMEDIA LTD - Analysis Report

Company Number: 13383666

Analysis Date: 2025-07-29 18:59 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Refresh Multimedia Ltd is a relatively new private limited company incorporated in 2021, engaged in retail sales via mail order and non-specialised stores. The company has demonstrated a positive trend in net current assets and net assets, improving from a net liability position in mid-2022 to a modest net asset position of £7,235 as of 31 December 2023. Their current assets, especially cash balances, have increased significantly, supporting short-term liquidity. However, the business remains small scale with limited equity (£100 share capital) and a single director. The increase in trade creditors and other current liabilities in 2023 suggests rising operational demands or delayed payments, which needs monitoring. Given the company's improving financial position but limited history and scale, credit facilities could be approved with conditions such as regular financial reporting and limits on exposure.

2. Financial Strength
   The balance sheet shows total current assets of £23,544 at year-end 2023, including cash of £10,474 and stock of £12,321, indicating inventory build-up which may tie up working capital. Current liabilities rose to £16,309 from £6,325 the previous year, primarily driven by increased trade creditors and tax liabilities. The company has no long-term debt as of 2023, improving solvency compared to 2022 when there was a £2,000 creditor due after one year. Net assets improved to £7,235 from £682, driven by retained earnings. The shareholder funds are modest but positive, reflecting some retained profitability or capital injections. Overall, the financial position is stable but remains vulnerable due to the small equity base and growing liabilities.

3. Cash Flow Assessment
   Cash at bank improved significantly from £3,162 in 2022 to £10,474 in 2023, enhancing liquidity. The company’s net current assets of £7,235 indicate positive working capital, supporting short-term obligations. However, the increase in stock levels to £12,321 may exert pressure on cash conversion cycles. Trade debtors decreased to £749, which may indicate effective collection or reduced sales on credit. The increase in trade creditors to £5,251 suggests the company is managing supplier payments possibly by extending payment terms. Overall, liquidity appears adequate but requires monitoring of stock turnover and creditor days to avoid cash flow strain.

4. Monitoring Points

• Monitor trends in trade creditors and tax liabilities to ensure they remain manageable and do not indicate cash flow stress.
• Track inventory levels versus sales to prevent overstocking and tied-up capital.
• Regularly review cash flow statements and debtor collection periods to confirm liquidity stability.
• Watch for any significant changes in turnover or profitability given the limited operating history.
• Confirm ongoing compliance with filing deadlines and corporate governance, given the single director structure.