S.F.B CONSULTANCY WATER MANAGEMENT LTD

Executive Summary

S.F.B Consultancy Water Management Ltd is a young, small consultancy with improving net assets and positive working capital, supported by director funding. The company’s liquidity is tight due to low cash and high receivables, requiring careful monitoring of cash flow and debtor collections. Conditional approval for credit is recommended, contingent on continued financial performance and liquidity management.

S.F.B CONSULTANCY WATER MANAGEMENT LTD - Analysis Report

Company Number: 14374891

Analysis Date: 2025-07-20 18:38 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   S.F.B Consultancy Water Management Ltd demonstrates a modest but improving financial position since incorporation in 2022. The company is active, with no overdue filings and a sole director who also controls 100% of voting rights and shares, indicating clear governance. However, the company is very young with limited financial history and relatively low cash balances (£1,967 as of 30/09/2024). The director’s loan account is substantial (£46,775), implying reliance on director funding which may pose a risk if external financing is required. Approval is recommended with conditions: ongoing monitoring of liquidity, profitability, and cash flow, plus confirmation of sustainable client contracts.

2. Financial Strength:
   The balance sheet shows positive net current assets (£45,314) and net assets (£45,314) as of 30 September 2024, up from £24,396 in 2023, reflecting growth. Current assets mainly consist of debtors (£54,581), indicating sales or services rendered but not yet collected, and minimal cash holdings. The company has no long-term liabilities currently, which is positive. Shareholders’ funds reflect accumulated retained earnings, indicating the business is generating some profit or capital injection. However, the director’s loan account within debtors is significant, so true operating asset strength is less than headline net assets suggest.

3. Cash Flow Assessment:
   Cash at bank is low and has decreased from £5,004 to £1,967 year-on-year, which suggests cash outflows exceeded inflows despite growth in receivables. The high level of debtors relative to cash raises concerns about the efficiency of collections and working capital management. Current liabilities are low (£11,234), so liquidity pressure is not immediate, but the company’s ability to convert receivables to cash promptly is critical to meet short-term obligations. Monitoring debtor ageing and cash conversion cycles is essential.

4. Monitoring Points:

• Debtor collection periods and any increase in aged debt
• Changes in cash balances and liquidity ratios monthly/quarterly
• Director loan account movements and potential calls on director for cash support
• Profitability trends in subsequent financial periods to ensure sustainability
• Compliance with filing deadlines and any changes in company status or management