Company Number: 13455231

Analysis Date: 2025-07-20 18:08 UTC

1. Credit Opinion: CONDITIONAL APPROVAL. SPENCER & JAMES LIMITED is an active private limited company engaged in combined office administrative services and employment placement activities. The company is relatively young (incorporated in 2021) and operates within micro-entity accounting thresholds. While it shows positive net assets, the decline in net assets and net current assets over the last year signals some liquidity pressure. The company’s ability to meet short-term obligations appears constrained given current liabilities exceed current assets for 2024. However, the directors appear experienced and there are no indications of director disqualifications or governance issues. Credit approval is recommended with conditions requiring monitoring of liquidity and periodic financial updates.

2. Financial Strength: The balance sheet shows modest fixed assets (£11.9k) and moderate current assets (£54.8k) as of June 2024. Current liabilities increased substantially to £64.2k from £45.7k in 2023, causing net current assets to turn negative at -£9.4k, a deterioration from positive net current assets in prior years. Total net assets dropped to £2.5k from £4.8k in 2023, indicating a weakening equity base. The company’s share capital is nominal at £100, and shareholder funds are low, limiting financial buffer. The decline in net assets and negative working capital are cautionary signs of potential cash flow stress.

3. Cash Flow Assessment: The company’s current liabilities exceed current assets, indicating a working capital deficit and potential liquidity strain. The drop in average employees from 10 to 5 in the latest year may reflect cost reduction efforts or restructuring. Without detailed cash flow statements, we infer the company may rely on short-term financing or delayed creditor payments to manage liquidity. The absence of overdue filings and stable director appointments is positive, but close monitoring of cash conversion cycles and creditor terms is advised.

4. Monitoring Points:

• Liquidity Ratios: Current ratio and quick ratio trends to detect worsening liquidity.
• Net Asset Movement: Further erosion in equity should trigger review.
• Profitability and Cash Flow: Monitoring future filed accounts for operating cash generation.
• Director Changes and Governance: Any turnover or governance issues.
• Debt Levels: Additional external borrowings or overdue payables.
• Employee Numbers: Workforce changes impacting operational capacity.