SERENITY ENTERPRISES LIMITED

Executive Summary

Serenity Enterprises Limited has a weak financial position with persistent negative net assets and poor liquidity, raising significant concerns about its ability to meet debt obligations. The company’s cash flow situation is strained, and without capital support or a clear turnaround plan, credit extension is not advisable. Close monitoring of liquidity and capital structure is essential if conditions improve.

SERENITY ENTERPRISES LIMITED - Analysis Report

Company Number: 12426396

Analysis Date: 2025-07-19 12:24 UTC

1. Credit Opinion: DECLINE
   Serenity Enterprises Limited shows persistent negative net assets and shareholders’ funds over multiple years, indicating chronic undercapitalization. The company’s net current liabilities and absence of cash at the latest year-end demonstrate poor liquidity and an inability to meet short-term obligations without external support. The presence of bank loans and overdrafts further stresses cash flow constraints. Given the company’s ongoing losses, negative equity, and lack of financial buffer, extending credit would be high risk without significant restructuring or capital injection.

2. Financial Strength:
   The balance sheet reveals consistent net liabilities: net assets were negative £7,949 at the end of 2024, although slightly improved from negative £9,267 in 2023. Fixed assets are minimal (£323) and the company relies heavily on short-term financing, as seen in current liabilities of £8,272 exceeding any current assets (which are effectively zero cash and negligible other current assets). Shareholders’ funds remain deeply negative (-£8,049), reflecting accumulated losses and a weak capital base.

3. Cash Flow Assessment:
   Cash at bank dropped to zero by 2024 year-end from £241 in 2023, indicating cash depletion. Current liabilities are substantial relative to available liquid resources, resulting in a negative working capital position of -£8,272. The company’s overdrafts and bank loans (£4,916) add to liquidity pressure. With only one employee and minimal asset base, operational cash generation appears insufficient to service debts or fund ongoing expenses.

4. Monitoring Points:

• Liquidity position and cash flow trends, especially ability to generate positive operating cash flow.
• Changes in current liabilities and bank borrowing levels indicating increasing pressure or relief.
• Any capital injections or equity restructuring to improve net asset position.
• Business plan updates demonstrating pathway to profitability and financial stability.
• Director changes and any impact on governance or strategic direction.