SQUIRREL PROJECTS LIMITED

Executive Summary

Squirrel Projects Limited is a small, micro-entity IT consultancy with positive working capital and net assets, though showing a recent decline in financial strength. The company appears capable of meeting short-term obligations but should be monitored closely for liquidity and equity erosion. Conditional credit approval is advised, with emphasis on ongoing financial surveillance and risk mitigation.

SQUIRREL PROJECTS LIMITED - Analysis Report

Company Number: 13200359

Analysis Date: 2025-07-29 16:38 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Squirrel Projects Limited shows adequate working capital and net assets for a micro-entity. However, the decline in net assets from £12,394 (2023) to £7,306 (2024) suggests some weakening financial position. The company is relatively young (incorporated 2021) and small in scale, so credit exposure should be limited. Approval is recommended with conditions such as monitoring financial performance closely and possibly requiring personal guarantees given limited equity and modest asset base.

2. Financial Strength:
   The balance sheet reveals a micro-sized business with total net assets of £7,306 and net current assets of £8,501 at the latest year end. Fixed assets are minimal (£1,505), indicating limited tangible collateral. The reduction in net current assets and net assets over the last year suggests some depletion of reserves or increased liabilities. Share capital is very low (£100), which is typical for small private companies. Overall, the company has a modest but positive equity base and no indication of insolvency risk.

3. Cash Flow Assessment:
   Current assets (£47,841) comfortably exceed current liabilities (£39,340), providing a positive net working capital of £8,501. This indicates the company should be capable of meeting short-term obligations. However, the decline from £12,736 to £8,501 in net current assets year-on-year signals a reduction in liquidity buffer. Since the company operates in IT consultancy with a small workforce (3 employees), cash flow volatility may be moderate but manageable. No audit was performed, so verification of cash flow quality is limited.

4. Monitoring Points:

• Track net current assets and liquidity trends to ensure working capital remains positive.
• Monitor net asset base for further declines that may affect solvency.
• Review accounts at next filing to identify reasons behind asset and equity decreases.
• Evaluate directors' management of expenses and revenue growth to improve financial stability.
• Consider the impact of economic conditions on IT consultancy demand and client payment patterns.