SCOT VET REFERRALS LIMITED

Executive Summary

Scot Vet Referrals Limited shows a strengthening balance sheet with improved net assets and cash levels, supported by significant tangible fixed assets. However, ongoing net current liabilities driven by director loans highlight liquidity risks and reliance on internal funding. Conditional credit approval is advised with close monitoring of working capital and director support.

SCOT VET REFERRALS LIMITED - Analysis Report

Company Number: SC682927

Analysis Date: 2025-07-29 19:12 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Scot Vet Referrals Limited demonstrates improving net asset value and shareholder equity over recent years, indicating a positive financial trajectory. However, persistent and significant net current liabilities, driven largely by director loans, imply liquidity pressures and reliance on insider funding. Approval is recommended with conditions including ongoing director support confirmation and monitoring of working capital improvements to ensure the company can meet short-term obligations without undue strain.

2. Financial Strength:
   The company’s net assets increased from £258k in 2022 to £476k in 2023, reflecting strengthened equity mainly via accumulated retained earnings. Tangible fixed assets remain substantial (£954k), supporting operational capacity. However, the balance sheet shows consistent net current liabilities (£264k deficit in 2023), primarily due to current liabilities exceeding current assets. The significant director loans (£530k in 2023) are critical to this position, indicating dependence on related-party funding rather than external creditors.

3. Cash Flow Assessment:
   Cash balances have improved substantially to £320k in 2023 from £127k in 2022, a positive sign for liquidity. Nonetheless, current liabilities remain high (£704k), creating a working capital deficit. The company’s ability to convert debtors and stock into cash efficiently will be vital. The reliance on directors’ loans to cover short-term liabilities poses a risk should this support be withdrawn. Cash flow forecasts should be reviewed regularly to confirm sustainability.

4. Monitoring Points:

• Director loan balances and their ongoing support commitment.
• Trends in net current assets and working capital management.
• Debtor collection periods and stock turnover rates.
• Profitability trends once income statements are available to assess operational cash generation.
• Any changes in fixed asset utilizations or impairments.