SHAPE 1 LTD

Executive Summary

Shape 1 Ltd is a micro-entity in the carpentry sector showing a significant weakening in financial position and liquidity over the past year. While still solvent with positive net current assets, the sharp reduction in cash reserves and shareholders’ funds raises concerns about operational sustainability. Conditional credit approval is recommended with close monitoring of cash flows and profitability to mitigate repayment risk.

SHAPE 1 LTD - Analysis Report

Company Number: 13878879

Analysis Date: 2025-07-20 13:32 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Shape 1 Ltd is a very small, recently incorporated private limited company operating in builders’ carpentry and joinery. The company shows a sharp decline in net assets and working capital from £13,986 and £12,927 respectively in 2024 to £2,506 and £1,764 in 2025. Cash reserves have dropped significantly from £17,608 to £2,257 in the same period. This deterioration in liquidity and equity suggests the company may be experiencing operational or financial stress. However, the company remains active, has no overdue filings, and maintains positive net current assets and shareholders’ funds, indicating some cushion to meet short-term obligations. Approval is conditional on monitoring cash flow closely and obtaining further assurances on revenue stability or additional capital injection.

2. Financial Strength:
   The balance sheet reflects a micro-entity with minimal fixed assets (£742) and low equity (£2,506). Shareholders’ funds have decreased markedly, signaling possible losses or distributions. Current liabilities are low (£493) compared to current assets (£2,257 cash plus other current assets implied), resulting in positive net current assets, but the cash position is weak. There is no director loan outstanding now, unlike the previous year when £1,387 was owed. Overall, the financial strength is fragile due to the recent decline but not yet insolvent or over-indebted.

3. Cash Flow Assessment:
   Cash dropped from £17,608 to £2,257 in one year, indicating negative operating or investing cash flow. The company holds minimal tangible assets and has no reported debt except for minor current liabilities (taxes and social security). The working capital remains positive but slim, limiting the company’s ability to absorb shocks or fund growth without additional financing. The single employee structure also suggests a lean operation. Liquidity risk is moderate and warrants tight cash flow management.

4. Monitoring Points:

• Cash balance trends and cash burn rate to ensure ongoing liquidity
• Profit and loss performance (not currently filed) to assess profitability and operational sustainability
• Any new loans or capital injections that might improve financial resilience
• Timely filing of accounts and confirmation statements to avoid regulatory risks
• Directors’ conduct and changes in ownership or control that may impact governance