Company Number: 13960356

Analysis Date: 2025-07-19 12:32 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Sabrosa Tacos Ltd is a micro-entity operating in the take-away food sector with a short trading history since incorporation in 2022. The company has shown turnover growth from £38.8k in its first year to £124.3k in the latest period. However, the company reported a small loss of £2,311 in the latest 13-month period, indicating marginal profitability issues. The balance sheet shows very limited net assets (£640) and modest fixed assets (£3,090). The low liquidity position, with current assets at only £450 and minimal net current assets, restricts financial flexibility. The directors appear engaged and have no adverse records. Given the nascent stage and tight working capital, credit should be extended cautiously with limits and covenants tied to performance and liquidity improvements.

2. Financial Strength:
   The balance sheet reflects a very small capital base consistent with a micro-entity. Net assets increased slightly from £530 to £640, but remain minimal. The company holds fixed assets of £3,090, primarily likely kitchen equipment or leasehold improvements, and current assets of £450, all of which suggest limited resource availability. There are provisions and accruals totaling £2,900, which reduce net asset value and indicate some outstanding liabilities or commitments. The small equity base and low net current assets imply limited buffer to absorb operational losses or unexpected expenses.

3. Cash Flow Assessment:
   The company’s net current assets of £450 indicate a very tight working capital position, with likely limited cash reserves given current assets are low. The lack of current liabilities reported in prior year suggests no short-term debt, but the increase in provisions and accruals may represent deferred payments or upcoming obligations. Staff costs have risen significantly, reflecting growth but also increased cash outflows. The modest turnover growth is positive, but the operating loss and tight liquidity highlight potential challenges in consistently meeting short-term obligations without additional cash injection or improved margins.

4. Monitoring Points:

• Monthly cash flow and working capital trends to detect liquidity stress early
• Profitability margins, especially cost of materials and staff costs relative to turnover
• Timely filing of accounts and returns to ensure regulatory compliance
• Any increases in provisions/accruals or short-term borrowing that may strain liquidity
• Directors’ ongoing involvement and any changes in ownership or management structure
• Business growth trajectory and response to competitive pressures in the food takeaway sector