SQUARE IT LTD

Executive Summary

SQUARE IT LTD is a very small, recently established IT services company with a modestly improved financial position but limited asset base and negative net current assets, indicating liquidity constraints. While it demonstrates potential for stable operations, its micro size and short track record warrant cautious credit limits with close cash flow monitoring. Continued oversight of liquidity and profitability is recommended to manage credit risk effectively.

SQUARE IT LTD - Analysis Report

Company Number: 14162321

Analysis Date: 2025-07-20 15:49 UTC

1. Credit Opinion: APPROVE with caution. SQUARE IT LTD is a micro-entity in the computer facilities management sector, showing a small but positive net asset position as of June 2024. The company recently improved its financial position from a net liability of £45 in 2023 to net assets of £108 in 2024. Its modest asset base and limited employee count (1 employee) reflect a very small operation, which limits operational scale but also reduces complexity. Given its short trading history (incorporated June 2022) and small size, credit exposure should be limited and monitored closely for cash flow sufficiency.

2. Financial Strength: The balance sheet shows minimal fixed assets (£259 in 2024, down from £2,292 in 2023) and current liabilities of £151, resulting in net current liabilities of £151. Despite the reduction in fixed assets, the company moved from a net liability position (-£45) to a net asset position (£108). Shareholders’ funds mirror net assets, indicating no external debt or complex financing structures. Overall, the company’s financial strength is weak but stable for its size, with limited asset backing.

3. Cash Flow Assessment: The net current assets figure is negative (£-151 in 2024), indicating current liabilities exceed current assets at the balance sheet date. This suggests potential liquidity pressure in meeting short-term obligations. However, given the micro-entity scale and absence of significant debt, the company may rely on owner funding or quick receivables turnover. Cash flow management should be a key focus to ensure operational continuity.

4. Monitoring Points:

   • Liquidity trends: Regularly review current assets versus current liabilities to detect emerging cash flow issues.
   • Profitability trajectory: Monitor the company’s ability to generate retained earnings to build equity over time.
   • Accounts filing timeliness: Maintain up-to-date statutory filings to avoid penalties and maintain transparency.
   • Operational scale and staff changes: Any increase in employees or fixed assets could impact credit risk.
   • Directors’ conduct and governance: Track any changes in director status or PSC to assess management quality.