STEP UP LANGUAGE CENTRE LTD

Executive Summary

STEP UP LANGUAGE CENTRE LTD exhibits critical liquidity and solvency weaknesses with negative net assets and a significant shortfall in current assets relative to current liabilities. Given this precarious financial position and lack of demonstrated profitability, the company is not a suitable candidate for credit extension at this time. Close monitoring of liquidity and capital structure is essential to reassess creditworthiness in the future.

STEP UP LANGUAGE CENTRE LTD - Analysis Report

Company Number: 14294307

Analysis Date: 2025-07-20 14:18 UTC

1. Credit Opinion: DECLINE
   The company shows significant current liabilities (£44,536) vastly exceeding its current assets (£371) as of 31 August 2024, resulting in negative net current assets (-£44,165). This indicates poor short-term liquidity and an inability to meet immediate debt obligations from available assets. The negative net assets position also raises concerns about insolvency risks. Given the company’s micro-entity size and early stage (incorporated 2022), the financial position is weak and does not support additional credit facilities without substantial improvement or external guarantees.

2. Financial Strength:
   The balance sheet reveals a deteriorating financial position over the last two years, with net assets declining from £33,308 (2022) to -£44,165 (2024). The company has no fixed assets reported, and the majority of liabilities appear to be short-term creditors. Shareholders’ funds are negative, suggesting that accumulated losses exceed equity injections. This weak capital structure signals limited financial resilience and an elevated risk profile.

3. Cash Flow Assessment:
   The company’s current assets, likely mostly cash and receivables, are insufficient to cover current liabilities. The negative working capital position indicates cash flow stress and potential difficulty in funding ongoing operations or repaying short-term debts. The average number of employees has decreased from 3 to 2, possibly a cost-cutting measure in response to financial strain, but the accounts do not provide explicit cash flow statements to confirm liquidity trends.

4. Monitoring Points:

• Monitor improvements in net current assets and cash balances to assess liquidity enhancement.
• Watch for reduction in short-term creditor balances and turnaround in net asset position.
• Review any new funding injections or guarantees from shareholders, especially from the controlling director.
• Track operational performance indicators (revenue, profitability) once available to evaluate business viability.
• Confirm timely filing of accounts and returns continues as a compliance baseline.