SETEAM LIMITED

Executive Summary

SETEAM LIMITED is financially fragile with persistent working capital deficits and minimal equity, limiting its ability to service debt. Liquidity has worsened over recent years with cash reserves depleted and fixed assets depreciated. Given these factors, credit approval is not recommended without significant improvement in cash flow and capitalization.

SETEAM LIMITED - Analysis Report

Company Number: 12510750

Analysis Date: 2025-07-29 18:05 UTC

1. Credit Opinion: DECLINE. SETEAM LIMITED demonstrates weak financial resilience with persistent negative net current assets and minimal equity. The company’s ability to meet short-term obligations is compromised by current liabilities exceeding current assets, indicating liquidity stress. Additionally, the stable but very low shareholder funds (£100) and ongoing erosion of fixed assets suggest insufficient capital buffer. The lack of profitability disclosures and no audit increases uncertainty about operational performance and cash generation. Combined with a single employee and a high dependency on director management, credit risk is elevated.

2. Financial Strength: The balance sheet shows very limited shareholder equity (£100) despite several years of operation since incorporation in 2020. Fixed assets have depreciated steadily from £14,153 in 2020 to £7,804 in 2024, indicating ongoing asset consumption without replacement or growth. Current liabilities consistently exceed current assets by approximately £1,300 to £1,600, reflecting working capital deficits. Trade creditors due within and beyond one year remain substantial and have not diminished significantly, further straining financial stability. The minimal share capital and absence of retained earnings highlight weak capitalization.

3. Cash Flow Assessment: Cash balances have decreased sharply from £9,201 in 2020 to £913 in 2024, indicating deteriorating liquidity. Debtor balances are low (£100), suggesting limited receivables turnover or weak sales growth. Negative net current assets reveal that short-term obligations are greater than liquid resources, risking payment delays or defaults. The company’s reliance on director input and absence of employees beyond one person may limit operational scalability and cash inflows. Without profit and loss details, it is difficult to assess cash generation, but balance sheet trends imply cash flow constraints.

4. Monitoring Points:

• Liquidity ratios: Current ratio and quick ratio to track improvements or further deterioration in working capital.
• Cash flow from operations: To confirm ability to generate positive cash and reduce reliance on external funding.
• Trade creditor days: To monitor if payment terms are being extended or creditors are becoming overdue.
• Asset utilization and reinvestment: To assess if fixed assets are being replaced or maintained adequately.
• Director’s financial support: Any injections of capital or personal guarantees that might mitigate credit risk.