SPEECH DEVELOPMENT PRODUCTIONS LTD

Executive Summary

Speech Development Productions Ltd is a newly formed micro-entity with a negative net asset and working capital position, indicating current financial weakness. Without evidence of trading profitability or cash flow strength, the company presents a high credit risk. Credit facilities are not recommended until the company demonstrates improved liquidity, solvency, and financial performance in future periods.

SPEECH DEVELOPMENT PRODUCTIONS LTD - Analysis Report

Company Number: 14597599

Analysis Date: 2025-07-20 16:19 UTC

1. Credit Opinion: DECLINE
   Speech Development Productions Ltd is a very recently incorporated micro-entity with a net current liability position of £3,909 and negative net assets as of the latest accounts (31 January 2024). The company has only one employee (the director) and minimal asset base (£17,000 current assets). The negative working capital and net assets suggest it is currently not financially stable and unable to meet short-term obligations without additional funding. Given the absence of trading history or profitability data, the credit risk is high and there is insufficient evidence of cash flow generation or financial resilience to support lending at this stage.

2. Financial Strength:
   The balance sheet shows a fragile financial position. Current liabilities (£20,909) exceed current assets (£17,000) resulting in a net current liability of £3,909. The overall net assets are negative by the same amount, indicating the company is technically insolvent on a balance sheet basis. This may reflect startup costs or initial losses typical in the first year but presents a risk until profitability or capital injection occurs. Shareholders’ funds are negative, showing no retained earnings or equity buffer.

3. Cash Flow Assessment:
   With negative net current assets, the company’s liquidity is constrained. Cash or cash equivalents are not separately disclosed but total current assets are low and insufficient to cover current liabilities. This implies working capital deficits and potential cash flow challenges. The company’s ability to generate positive operating cash flow is unproven, and reliance on director funding or external financing is likely necessary in the near term.

4. Monitoring Points:

• Track subsequent filing of full accounts, including profit & loss and cash flow statements, to assess trading performance and cash generation.
• Monitor any capital injections or director loans that improve liquidity and solvency.
• Watch for timely filing of future accounts and confirmation statements to ensure compliance and transparency.
• Review changes in current liabilities and any new debt facilities or credit arrangements.
• Assess director’s management of working capital and cost control as business develops.