SITE TOOLS LTD

Executive Summary

SITE TOOLS LTD is a newly formed micro-entity with limited operational history and a weak liquidity position due to significant short-term liabilities exceeding current assets. While net asset value has improved slightly, the company’s ability to service debt and meet short-term obligations remains uncertain. Conditional credit approval is advised with close monitoring of liquidity and financial updates to mitigate credit risk.

SITE TOOLS LTD - Analysis Report

Company Number: 14367866

Analysis Date: 2025-07-29 13:34 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   SITE TOOLS LTD is a very young micro-entity incorporated in 2022 with a limited operating history. The company shows modest net assets of £49,653 as at June 2024, an improvement over the previous year. However, the balance sheet reveals a significant mismatch between current liabilities (£507,410) and current assets (£6,614), resulting in a large negative working capital position (-£500,796). This raises concerns about the company's short-term liquidity and ability to meet immediate obligations. Given the small size and micro-entity filing status, detailed profitability and cash flow data are unavailable, limiting visibility on operational cash generation. The business operates in online retail (mail order/internet sales), which can be volatile. The principal director holds significant ownership and control, indicating aligned management interests but also concentrated risk. Approval is recommended only with conditions including periodic financial updates, monitoring liquidity closely, and possibly securing additional collateral or guarantees.

2. Financial Strength:

• Fixed assets are substantial (£550k), consistent over two years, but current assets are minimal.
• Current liabilities far exceed current assets, indicating working capital deficiency and potential liquidity stress.
• Net assets improved from £35k to £49k year-on-year, showing some capital injection or retained earnings, but the overall balance sheet remains weak with high short-term obligations.
• Shareholders’ funds equal net assets, suggesting no external debt beyond current liabilities.
• The small employee base (1 employee) keeps overheads low but also indicates limited operational scale.

3. Cash Flow Assessment:

• The large negative net current assets suggest cash flow mismatches and possible reliance on external funding or director loans to meet short-term liabilities.
• Absence of detailed cash flow statements restricts precise assessment, but the working capital structure warns of liquidity risk.
• The company should maintain robust cash management, ensuring receivables and payables cycles are tightly controlled to avoid default.

4. Monitoring Points:

• Track current ratio and net working capital in future accounts to confirm improvement or deterioration.
• Monitor creditor days and debtor collection efficiency given the large liabilities due within one year.
• Review director loans or related party transactions that might support liquidity.
• Assess any changes in ownership or control that could impact stability.
• Confirm ongoing compliance with filing deadlines and absence of adverse credit events.