ROXY'S PET SHOP LIMITED

Executive Summary

Roxy’s Pet Shop Limited is a newly established business showing adequate initial financial stability with positive net assets and liquidity. The company demonstrates sound governance and timely compliance, but limited trading history warrants conditional approval with close monitoring of cash flow and debt obligations. The current balance sheet structure and working capital position support modest credit extension, subject to ongoing review.

ROXY'S PET SHOP LIMITED - Analysis Report

Company Number: 15550061

Analysis Date: 2025-07-20 16:26 UTC

1. Credit Opinion: APPROVE with caution. Roxy's Pet Shop Limited is a newly incorporated private limited company (March 2024) operating in retail sales of pet-related products. The company has filed timely accounts with no overdue filings, indicating compliance and good governance. The directors are also the principal shareholders with balanced control, suggesting aligned management interests. However, as the business is newly established with a single financial year reported, there is limited historical financial performance data to fully assess operational stability. The company shows positive net assets and working capital, but some reliance on hire purchase liabilities is noted. Therefore, credit facilities could be extended with monitoring conditions on cash flow and debt servicing.

2. Financial Strength: The balance sheet as of 31 March 2025 shows total assets of £53,414 (fixed assets £13,918 and current assets £39,496). Current liabilities stand at £34,554, resulting in net current assets (working capital) of £4,942. After accounting for long-term liabilities of £8,251 (hire purchase contracts), net assets total £10,609, all funded by shareholders’ equity. The company’s tangible fixed assets consist primarily of motor vehicles acquired under hire purchase agreements, which introduces some financial leverage. The low share capital (£2) and retained earnings (£10,607) reflect the company's early stage. Overall, the balance sheet is modest but sound for a start-up, with positive equity and no indications of insolvency.

3. Cash Flow Assessment: Cash at bank of £27,650 is a strong component of current assets, providing liquidity to cover short-term obligations. Debtors amount to £2,586 and inventory (stocks) £9,260, which are reasonable for a retail business. Current liabilities include hire purchase dues (£2,979), taxation and social security (£9,086), and other creditors (£22,489). The company’s net current assets of £4,942 indicate it can meet its short-term liabilities, but the creditor balance is significant relative to cash and debtors, highlighting a need for efficient working capital management. The hire purchase commitments beyond one year (£8,251) require ongoing cash flow to service debt. Close monitoring of cash conversion cycles and debt servicing capacity is advised.

4. Monitoring Points:

• Cash flow trends in subsequent periods, especially the ability to meet hire purchase and tax obligations.
• Inventory turnover and debtor collection periods to ensure working capital remains positive.
• Profitability and revenue growth as the company matures beyond its first financial year.
• Any increase in long-term liabilities or additional borrowing affecting leverage.
• Directors’ compliance with filing deadlines and any changes in management or control.
• External market conditions affecting retail demand in the pet shop sector.