SHAMS DIGITAL MARKETING LIMITED

Executive Summary

SHAMS DIGITAL MARKETING LIMITED is currently in a financially distressed position with significant negative net assets and poor liquidity. The company’s ability to meet short-term obligations is weak due to a large increase in current liabilities and minimal cash reserves, heavily relying on director loans. Without immediate financial restructuring or improved cash flow, the credit risk is high, leading to a recommendation to decline credit facilities at this time.

SHAMS DIGITAL MARKETING LIMITED - Analysis Report

Company Number: 14182575

Analysis Date: 2025-07-29 17:51 UTC

1. Credit Opinion: DECLINE
   SHAMS DIGITAL MARKETING LIMITED shows significant deterioration in financial position over the latest period. The company has moved from positive net assets of £1,239 (mid-2023) to substantial net liabilities of £35,866 as at 31 December 2024. Current liabilities have surged to £36,184 versus minimal current assets of £318, indicating severe liquidity concerns and an inability to cover short-term obligations. The presence of director loans (£18,711) as part of current liabilities suggests reliance on related party funding to sustain operations. Given the negative working capital and net asset base, the company’s capacity to service new or existing debt facilities is highly questionable without additional capital injection or operational turnaround.

2. Financial Strength:
   The balance sheet reflects weak financial health. Fixed assets have been fully disposed of, leaving no long-term tangible assets. Current liabilities have dramatically increased from £2,313 to £36,184 within 18 months, mainly due to director loans and other creditors. The equity base has been eroded into negative territory, indicating accumulated losses and insufficient retained earnings. The company’s leverage and solvency ratios would be poor, signaling high financial risk.

3. Cash Flow Assessment:
   Cash reserves are minimal (£318), insufficient to meet even a fraction of current liabilities. The company’s net current assets position is severely negative (-£35,866), exposing a critical liquidity gap. No trade debtors are recorded as of the latest accounts, implying cash inflows from operations may be limited or delayed. The reliance on director loans to fund working capital needs indicates weak operating cash flows and potential funding stress.

4. Monitoring Points:

• Track changes in current liabilities, particularly director loans and other creditors.
• Monitor cash balances and operating cash flow generation closely.
• Watch for any capital injections or refinancing that improve liquidity.
• Review upcoming filings for evidence of profit generation or reduction in losses.
• Assess management actions to control costs and improve debtor collection.