Company Number: NI701285

Analysis Date: 2025-07-19 12:44 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Stitch and Weave Limited is a newly incorporated private limited company in the public houses and bars sector with one year of trading history. The company shows a positive net asset position but has significant working capital deficiencies and current liabilities exceeding current assets by £169,510. The modest net assets of £1,274 and a non-audited abridged filing limit the depth of financial assurance. Approval is conditional on obtaining more detailed cash flow forecasts, confirmation of ongoing revenue streams, and a suitable working capital management plan to mitigate liquidity risk.

2. Financial Strength:

• Fixed assets stand at £195,784, mainly tangible assets, indicating recent investment in property, plant, or equipment.
• The company’s net assets are positive but minimal at £1,274, reflecting very thin equity backing.
• Current liabilities (£359,569) notably exceed current assets (£190,059), resulting in negative net current assets of £169,510, a concern for short-term solvency.
• Long-term liabilities of £25,000 suggest some debt financing but at a manageable level relative to net assets.

3. Cash Flow Assessment:

• Cash on hand is £131,814, which is the largest component of current assets and crucial for immediate liquidity.
• Debtors are low (£18,718), but trade creditors and other short-term payables total £359,569, which may strain cash flows if revenue inflows are inconsistent or delayed.
• The company employs 39 staff, indicating relatively high operating costs that require steady cash inflow.
• Negative working capital signals potential difficulties in meeting short-term obligations without external support or improved cash generation.

4. Monitoring Points:

• Monitor quarterly cash flow statements for adequate liquidity and timely creditor payments.
• Watch the evolution of net current assets; improvements would indicate better working capital management.
• Track revenue growth and profitability trends as the company matures beyond its first year.
• Evaluate any increase in debt levels or late payment patterns that could signal financial stress.
• Review management’s ability to control operating costs and optimize stock and debtor levels.