SPRING P LIMITED

Executive Summary

SPRING P LIMITED has demonstrated a notable financial recovery with improved working capital and increased net assets over the past year. While the company remains small with limited cash reserves, its compliance record and positive trajectory support conditional credit approval. Continued monitoring of liquidity and profitability is essential to mitigate risks associated with its modest scale and retail sector exposure.

SPRING P LIMITED - Analysis Report

Company Number: 13453725

Analysis Date: 2025-07-20 17:27 UTC

1. Credit Opinion:
   CONDITIONAL APPROVAL. SPRING P LIMITED, a retail business dealing in second-hand goods, shows a positive turnaround in financial health over the last two years, moving from net current liabilities to positive working capital and increasing net assets significantly. However, the company remains relatively small with modest cash reserves and limited tangible assets. The directors have maintained compliance with filing requirements and there are no adverse issues noted with management. Approval for credit facilities is recommended with conditions: ongoing monitoring of liquidity and profitability, and possibly a limit on exposure until the company demonstrates consistent cash flow and profitability.

2. Financial Strength:
   The balance sheet displays improving financial strength. Net assets rose from £1,772 in 2023 to £4,939 in 2024, driven by an increase in retained earnings (profit and loss account) from £1,672 to £4,839. Tangible fixed assets are modest (£2,820), mainly motor vehicles, and cash increased from £3,100 to £6,160. The company moved from a net current liability position (-£1,988 in 2023) to a net current asset position (£2,119 in 2024), indicating a strengthening short-term financial position. Shareholder funds remain low but have nearly tripled in a year, reflecting retained profits or capital injections.

3. Cash Flow Assessment:
   Cash position improved to £6,160, providing a reasonable buffer against current liabilities (£4,041). The positive net current assets indicate that the company has sufficient short-term liquidity to cover its immediate obligations. The average number of employees is low (2), suggesting limited fixed overheads, which supports operational flexibility. However, cash remains relatively low in absolute terms, so the company may be vulnerable to unexpected expenses or downturns. Working capital management appears effective recently but requires continued close monitoring.

4. Monitoring Points:

• Maintain close watch on cash flow trends to ensure liquidity remains sufficient to cover current liabilities.
• Monitor profitability and retained earnings growth to confirm ongoing improvement in financial resilience.
• Track any changes to creditor balances, particularly "other creditors," which remain significant (£3,543).
• Keep an eye on management continuity and director actions, especially given recent appointment in November 2023.
• Review turnover and gross margin trends to assess business sustainability in a competitive retail sector.