RUSTIC YARD LTD

Executive Summary

Rustic Yard Ltd has made strides from negative net assets to a marginally positive equity position, showing early signs of financial recovery. However, liquidity remains tight with negative working capital and low cash reserves. Credit approval is recommended on a conditional basis with close monitoring of cash flow and debtor management to mitigate risk.

RUSTIC YARD LTD - Analysis Report

Company Number: 13116683

Analysis Date: 2025-07-20 13:33 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Rustic Yard Ltd is an active private limited company engaged in furniture manufacturing. The company shows improvement from the prior year, moving from net liabilities to a positive but marginal net asset position. However, net current liabilities of £835 indicate short-term liquidity pressure. The presence of director advances and the small shareholder funds base suggest the company is still fragile. Credit approval can be considered with conditions such as limits on exposure, regular financial monitoring, and assurance of additional working capital or director support.

2. Financial Strength:
   The balance sheet indicates a modest net asset value of £245 as of 31 January 2024, up from negative net assets of £3,174 the previous year. Fixed assets stand at £1,440, largely in plant and machinery, depreciated over time. Current assets of £9,520 comprise mostly debtors (£9,480), with very low cash (£40), while current liabilities total £10,355. The company’s reliance on sizable trade receivables and low cash reserves reflects working capital constraints. Share capital is nominal (£2), highlighting limited equity cushion.

3. Cash Flow Assessment:
   The negative net current assets (-£835) reveals a working capital deficit, raising concerns about the company’s ability to meet short-term obligations promptly. Cash on hand is minimal, and a significant portion of current assets is tied up in debtors. Director’s loans have fluctuated, with a positive balance owed to the director as of the latest year-end, which may provide some informal liquidity support. The company needs to improve cash collection and control creditor payments to maintain operational liquidity.

4. Monitoring Points:

• Monitor debtor collection periods and aging to avoid cash flow bottlenecks.
• Track changes in current liabilities and ensure tax and social security payments remain current, as these represent a large part of short-term liabilities.
• Watch for any further director advances or withdrawals, as these impact liquidity and financial stability.
• Observe profitability trends and cash generation once profit and loss data become available to ensure sustainable operations.
• Review any changes in ownership or director appointments that might affect governance or financial backing.