Company Number: 14149921

Analysis Date: 2025-07-29 20:16 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Stitchco Limited is an active private limited company operating in the wholesale and manufacturing of clothing and textiles sector. The company has shown positive growth in shareholders’ funds and net current assets from 2023 to 2024, indicating improving equity and liquidity. However, the company is relatively young (incorporated 2022), and the financial statements are unaudited, which introduces some risk. The current ratio is slightly above 1 (current assets £1.55m vs current liabilities £1.35m), suggesting adequate but not robust short-term liquidity. Given these factors, credit facilities could be approved with conditions including ongoing monitoring of receivables and liquidity, and requiring updated financial information regularly.

2. Financial Strength:

• Shareholders’ funds increased from £111,554 to £217,686, reflecting retained earnings growth and improved net asset position.
• Fixed assets stand low at £19,766, showing limited capital investment so far.
• Current assets decreased from £2.73m to £1.55m, mainly due to a reduction in debtors from £2.59m to £1.32m and cash from £127.5k to £54.6k.
• Current liabilities also decreased from £2.64m to £1.35m, maintaining a positive net current asset position (£197,920).
• The company operates with a modest working capital buffer (current ratio approx. 1.15), which is acceptable but requires vigilance.

3. Cash Flow Assessment:

• Cash at bank is relatively low (£54,626), which might constrain immediate liquidity.
• Debtors remain the largest component of current assets (£1.32m), so the company's cash flow depends heavily on timely collection of receivables.
• The reduction in debtor balances from the prior year may indicate improved cash collection or reduced sales; this should be clarified.
• Working capital is positive and improved, but the company should be monitored for any delays in receivables or supplier payments that could stress liquidity.

4. Monitoring Points:

• Receivables turnover and aging to ensure collections remain timely and reduce credit risk.
• Cash balances and operating cash flow to confirm liquidity remains sufficient for debt servicing.
• Profitability trends, as the company does not provide an income statement, which obscures operating performance.
• Any significant changes in creditors or stock levels that could signal operational or financial stress.
• Director changes and any impact on governance or financial stewardship.
• Compliance with filing deadlines and timely submission of audited or reviewed accounts in the future to reduce informational risk.