SINAL INVESTMENTS LTD

Executive Summary

Sinal Investments Ltd shows a stable asset base but faces liquidity challenges due to significant current liabilities exceeding current assets. The company’s low equity and negative working capital warrant conditional credit approval, requiring robust cash flow assurances or additional security. Ongoing monitoring of working capital and debt servicing is essential to mitigate credit risk.

SINAL INVESTMENTS LTD - Analysis Report

Company Number: 13574990

Analysis Date: 2025-07-29 17:43 UTC

1. Credit Opinion: CONDITIONAL Sinal Investments Ltd demonstrates a stable but fragile financial position. The company holds significant fixed assets (£1.15M) but suffers from persistent current liabilities exceeding current assets, resulting in negative net working capital (-£326k in 2024). While net assets have improved slightly to £33,962, the high level of long-term creditors (£787k) raises concerns about liquidity and debt servicing capacity. Given the absence of employees and limited current assets, the company’s short-term cash flow appears constrained. Approval for credit facilities would be conditional on obtaining satisfactory cash flow forecasts or additional security to mitigate liquidity risk.

2. Financial Strength: The company is asset-heavy with fixed assets around £1.15 million, consistent over the last three years. However, current liabilities remain high and unchanged at £787,465, leading to negative net current assets and working capital deficits. The company’s shareholders’ funds are very low, though showing modest improvement from £17,746 in 2023 to £33,962 in 2024, indicating limited retained earnings or reserves. The balance sheet suggests the company is leveraged primarily through long-term creditors, and net assets are minimal relative to liabilities, indicating weak financial cushioning.

3. Cash Flow Assessment: Current assets are very low (£4,679 in 2024) compared to current liabilities (£787,465), resulting in negative working capital of over £326,000. This mismatch suggests potential liquidity stress and limited ability to meet short-term obligations without refinancing or converting fixed assets to cash. The company’s lack of employees and minimal trade debtors or stock implies it may have limited operating cash inflows. Cash flow risk is elevated unless there are undisclosed sources of liquidity or owner support.

4. Monitoring Points:

• Working Capital Trends: Continued negative net current assets should be closely monitored.
• Debt Repayment Schedule: Scrutinize the timing and servicing of the £787k creditors falling due after one year.
• Cash Flow Forecasts: Require management to provide updated liquidity projections and plans to improve current assets.
• Asset Valuation: Monitor any changes in fixed asset values or disposals which could impact collateral coverage.
• Ownership and Management: Watch for any changes in controlling shareholders or directors that could affect governance or financial strategy.