SIVAM LTD

Executive Summary

Sivam Ltd is currently facing significant financial distress with large negative net assets and liquidity shortages, undermining its ability to meet its short-term obligations. The company’s worsening balance sheet position and cash flow challenges warrant a decline of credit facilities unless substantial financial support or operational improvements occur. Close monitoring of liquidity and capital structure is essential going forward.

SIVAM LTD - Analysis Report

Company Number: 12773875

Analysis Date: 2025-07-29 19:23 UTC

Credit Opinion:
DECLINE. Sivam Ltd shows a deteriorating financial position with significant net liabilities and negative working capital. Current liabilities substantially exceed current assets by over £110k as of the latest accounts (July 2024), indicating severe liquidity constraints. The company’s negative shareholders’ funds of £90,541 and worsening net asset position reflect ongoing losses and poor financial stewardship, raising questions about its ability to meet short-term obligations and service debt.

Financial Strength:
The balance sheet reveals persistent net liabilities, which have worsened from £27,523 in July 2023 to £90,441 in July 2024. Fixed assets are minimal (£19,600) and declining, and current liabilities have increased sharply from £84,225 to £141,937 in one year. The company’s equity base is negative and shrinking, indicating the business is insolvent on a balance sheet basis. This signals weak financial resilience and reliance on creditor funding to sustain operations.

Cash Flow Assessment:
Cash balances have fallen from £16,202 to £10,496 despite increased liabilities, highlighting cash flow pressures. The negative net current assets position (-£110,041) shows the company lacks sufficient liquid resources to cover short-term debts, which is a critical concern for creditor risk. The business may be relying on delayed payments or additional credit lines, which is unsustainable long-term without improvement in cash generation.

Monitoring Points:

• Monitor cash flow improvements and liquidity ratios closely (current ratio, quick ratio).
• Watch for further increases in current liabilities or worsening net working capital.
• Track any capital injections or debt restructuring efforts by the sole shareholder.
• Review future accounts for signs of profitability or reduction in accumulated losses.
• Assess director’s plans for financial turnaround or risk of insolvency proceedings.