ROOTSTOCKLABS UK LIMITED

Executive Summary

Rootstocklabs UK Limited is a recently established private company with a positive working capital and net asset position indicative of initial operational activity. However, significant long-term liabilities and limited equity require closer examination before extending credit. Conditional approval is recommended, subject to further clarity on debt terms and cash flow sustainability to ensure repayment capacity.

ROOTSTOCKLABS UK LIMITED - Analysis Report

Company Number: 15084260

Analysis Date: 2025-07-29 17:30 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Rootstocklabs UK Limited is a newly incorporated company (August 2023) operating in business support services. The latest unaudited accounts to 31 December 2024 show a modest net asset position (£68.5k) with positive working capital (£326k). The company demonstrates operational activity with inventories and trade debtors of £105k and £474k respectively, indicating ongoing business. However, the company carries significant long-term liabilities (£257k) which reduces net assets. Given its young age and the presence of significant creditors, credit approval should be conditional on obtaining further information on the nature and terms of these liabilities and future cash flow projections to confirm debt servicing capability.

2. Financial Strength:
   The balance sheet shows total current assets of £666k against current liabilities of £340k, implying a healthy working capital position and a current ratio near 2:1, which is positive for short-term liquidity. Net assets of £68.5k reflect limited equity but are positive. The called-up share capital is minimal (£6.25k), with accumulated profits of £62.3k, suggesting some retained earnings or capital contributions. The significant creditors falling due after more than one year (£257k) represent financial commitments that require scrutiny. Overall, the financial position is stable for a start-up but the gearing (creditors vs equity) is high, which may constrain financial flexibility.

3. Cash Flow Assessment:
   Cash at bank is £87.8k, which alongside trade debtors and inventory supports liquidity. Trade debtors of £474k represent a large portion of current assets; the credit risk and collection period should be assessed to ensure timely cash inflows. The company has trade creditors of £57k and other short-term liabilities of £283k, including tax and accruals, which appear manageable given current assets. However, the sizable long-term creditor balance indicates reliance on external funding or deferred payments that could pressure future cash flows. Continuous monitoring of cash conversion cycle and creditor payment terms is advised.

4. Monitoring Points:

• Nature and repayment terms of long-term creditors (£257k) to assess refinancing or repayment risk.
• Trade debtor aging and collection efficiency to verify liquidity sustainability.
• Profitability trends and cash flow forecasts as the company matures beyond its startup phase.
• Director changes and control structure impact, noting one director resigned in March 2025.
• Compliance with filing deadlines and any changes in business operations or financial structure.