ROMANIAN LOUNGE LTD

Executive Summary

Romanian Lounge Ltd is a small, recently established event catering company with a fragile financial position marked by negative working capital and minimal net assets. While currently compliant with filing requirements and operational under experienced ownership, its limited liquidity and lack of profitability data warrant cautious credit terms. Conditional approval is recommended, subject to ongoing financial monitoring and demonstration of improved cash flow and equity support.

ROMANIAN LOUNGE LTD - Analysis Report

Company Number: 14187208

Analysis Date: 2025-07-20 11:34 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Romanian Lounge Ltd is a newly incorporated micro-entity operating in event catering, currently active and filing on time. However, its balance sheet shows a net current liability of £6,258 and minimal net assets (£1,422). This weak working capital position indicates limited short-term liquidity and potential cash flow constraints. The sole director and 100% owner, Florentina Petrescu, appears to have operational control, but the lack of profitability data or positive retained earnings raises concerns about ongoing financial resilience. Credit approval is possible but should be conditional on the provision of updated management accounts demonstrating improved liquidity and cash flow, as well as personal guarantees if lending is requested.

2. Financial Strength:
   The company has fixed assets of £7,680 and current assets of £41,518, which are outweighed by current liabilities of £47,776, resulting in negative net current assets of £6,258. The total net assets are just £1,422, reflecting minimal equity support. For a micro-entity in early years, this is not uncommon, but it does highlight a fragile financial base with limited buffer to absorb shocks or meet unexpected liabilities.

3. Cash Flow Assessment:
   There is no direct cash flow statement provided, but the negative working capital position suggests tight liquidity. The company’s ability to meet short-term obligations may rely heavily on timely collection of receivables and controlling payables. With six employees on average, payroll commitments may also impact cash flow. Monitoring cash conversion cycles and maintaining sufficient cash reserves will be critical for ongoing operations.

4. Monitoring Points:

• Quarterly or interim financial updates to track improvements or deterioration in working capital and net assets.
• Confirmation of profitability trends and cash flow generation from trading activities.
• Review of director’s commitment and any personal financial support if extended credit.
• Watch for any overdue filings or changes in director status that might indicate operational difficulties.