Company Number: 13452649

Analysis Date: 2025-07-29 17:10 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Simo Build Limited is a very small, privately owned building completion company with minimal net assets (£269 at 30 June 2024) and limited liquidity. The company remains active and compliant with filing obligations, which is positive. However, the declining net asset base from £833 in prior years to £269 indicates erosion of financial strength. The small scale and low equity cushion limit resilience to adverse trading conditions or unexpected expenses. The company’s ability to service debt will depend heavily on maintaining positive operating cash flow and managing working capital prudently. Given the modest financial position, credit approval is recommended on a conditional basis with monitoring of cash flow and profitability.

2. Financial Strength:
   The balance sheet shows very limited net assets (£269) and modest current assets (£1,448) against current liabilities (£1,179). The company has a positive working capital position but with a low margin. The retained earnings have fallen significantly from £733 to £169, reflecting reduced accumulated profits or possible losses in the current year. There are no fixed assets recorded, and the company relies on short-term assets and shareholder equity. The director’s overdrawn balance (£1,588) is a concern as it represents funds drawn from the company, potentially weakening liquidity further.

3. Cash Flow Assessment:
   Cash and cash equivalents have decreased from £296 to £185, showing some tightening in liquidity. Debtors have increased, which could indicate either growth in sales or slower collections; this requires careful monitoring. Creditors remain stable, but corporation tax payable has increased significantly to £787, suggesting taxable profits but also a cash outflow obligation. With only two employees including the director, operating expenses are likely low, but the limited cash reserves mean the company needs to manage cash flow carefully to avoid liquidity strain.

4. Monitoring Points:

• Watch net asset trend closely to detect further erosion of equity.
• Monitor cash balances and debtor collection periods to ensure liquidity remains adequate.
• Track profitability and retained earnings movement in future accounts to confirm financial recovery or stability.
• Review director’s loan account for any further drawings that could stress cash flow.
• Ensure corporation tax payments are met timely to avoid penalties or cash flow disruption.