STEM CONSULTING LTD

Executive Summary

STEM Consulting Ltd is an early-stage, single-director micro-entity with negative equity and insufficient current assets to cover liabilities, posing a high credit risk. The company lacks financial strength and cash flow capacity to service new debt, leading to a credit decline recommendation. Close monitoring of future financial performance and capital support is essential before reconsidering credit exposure.

STEM CONSULTING LTD - Analysis Report

Company Number: 14971911

Analysis Date: 2025-07-29 16:31 UTC

1. Credit Opinion: DECLINE
   STEM Consulting Ltd is a newly incorporated micro-entity with only one full financial year filed. The balance sheet shows net liabilities of £1,345, indicating negative equity and weak financial footing. Current liabilities exceed current assets, resulting in negative working capital. This suggests limited capacity to meet short-term obligations or service new debt reliably. The absence of trading history and low asset base create uncertainty around cash generation and business sustainability. Without evidence of external funding or improving financials, extending credit would be high risk.

2. Financial Strength:
   The company’s total assets equal £303, offset by current liabilities of £1,648, resulting in net liabilities of £1,345. Shareholders’ funds are negative, reflecting accumulated losses or initial funding shortfall. The micro-entity status means limited disclosure, but the negative net current assets signal potential liquidity stress. As a single-director company with no additional equity or asset base, financial resilience is minimal. There is no indication of fixed assets or investments that might support borrowing capacity.

3. Cash Flow Assessment:
   With current liabilities substantially exceeding current assets, working capital is negative. The company holds only £303 in current assets, likely cash or receivables, against £1,648 in creditors due within one year. This mismatch points to a cash flow deficit and inability to cover immediate payables without fresh capital injection. Since the company has only one employee (the director) and is recently incorporated, operating cash flows are presumably minimal or negative at this stage.

4. Monitoring Points:

• Future filings to assess improvement in net assets and working capital.
• Cash flow trends to verify ability to meet short-term liabilities.
• Any capital injections or loans by the shareholder to support operations.
• Trading performance and profitability indicators in subsequent accounts.
• Director’s actions to build financial stability and secure sustainable revenues.