RELM BESPOKE LTD

Executive Summary

RELM BESPOKE LTD demonstrates significant financial distress with worsening working capital deficits and negative net assets, indicating poor solvency and liquidity. The company’s cash position is critically low against increasing liabilities, raising serious concerns about its ability to meet short-term obligations. Given these factors, credit approval is not recommended at this time without substantial financial restructuring or increased capital injection.

RELM BESPOKE LTD - Analysis Report

Company Number: 13990201

Analysis Date: 2025-07-20 11:14 UTC

1. Credit Opinion: DECLINE
   RELM BESPOKE LTD exhibits significant financial distress with large and growing net current liabilities and negative shareholders' funds. The company’s current liabilities have nearly doubled from £150,593 in 2023 to £287,734 in 2024, while current assets have decreased slightly, resulting in a worsening working capital deficit of £257,267. The negative net assets of £200,632 indicate insolvency on a balance sheet basis. The company is unable to cover short-term obligations with readily available assets, which strongly suggests an inability to service new or existing debt.

2. Financial Strength:
   The balance sheet shows weak financial health. Fixed tangible assets have increased moderately (£48,234 to £56,635), indicating some investment in plant and machinery, but this is overshadowed by the substantial increase in current liabilities. The company’s equity position remains deeply negative (£-62,590 in 2023 to £-200,632 in 2024), reflecting accumulated losses and a deteriorating capital base. The very minimal cash balance (£467) compared to high creditors signals liquidity risk. Overall, the company is financially fragile with poor solvency metrics.

3. Cash Flow Assessment:
   Liquidity is a key concern. Cash on hand has fallen sharply from £9,769 to £467, leaving very limited immediate cash resources. Debtors remain static at £30,000, suggesting limited growth or collection issues. The large creditor balance (£287,734) and bank loans (£4,677) require prompt settlement, yet the company has insufficient working capital. Without clear cash inflows or financing, the company faces difficulty meeting short-term commitments, implying weak operational cash flow and potential reliance on external funding or director support.

4. Monitoring Points:

• Monitor current liabilities and creditor payments closely for any signs of missed payments or defaults.
• Track cash flow trends monthly to assess operational liquidity and potential need for emergency funding.
• Review debtor collection efficiency to improve cash conversion cycle.
• Watch for any changes in shareholder funding or director loans that may affect solvency.
• Evaluate any new financial statements for improvements or further deterioration in net assets and working capital.