STONEFIELD CONSULTING LTD

Executive Summary

Stonefield Consulting Ltd demonstrates a sound but diminishing financial position with positive net assets and working capital. Limited trading history and a recent decline in liquidity advise conditional credit approval with close monitoring of cash flow and financial trends. The company’s small scale and director control require additional scrutiny to mitigate risk.

STONEFIELD CONSULTING LTD - Analysis Report

Company Number: 13648516

Analysis Date: 2025-07-20 13:00 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Stonefield Consulting Ltd is a relatively new micro-entity with a short trading history since incorporation in September 2021. The company shows positive net assets and working capital, indicating an ability to meet short-term obligations. However, there is a noticeable decline in net assets and current assets in the latest year, which suggests some weakening in financial position. Given the limited financial track record, credit approval should be conditional on regular monitoring of financial performance and cash flow, and possibly on obtaining personal guarantees or additional security given the directors’ direct control and small scale.

2. Financial Strength:
   The balance sheet shows net assets of £31,448 as of 30 September 2024, down from £53,612 the prior year. Fixed assets are minimal (£7,983), consistent with a service-oriented business. Current assets decreased significantly from £90,745 to £51,602, while current liabilities also decreased but less proportionally, resulting in net current assets of £39,437 (previously £68,725). The company retains positive shareholders’ funds and net current assets, but the decline year on year indicates a contraction in liquidity and overall financial strength. The company’s micro-entity status and small workforce (2 employees including directors) limit operational scale.

3. Cash Flow Assessment:
   Current assets notably include cash and/or receivables but have diminished considerably over the last year. Current liabilities are manageable but accruals and deferred income remain fairly stable (~£16k), which could indicate timing differences in revenue recognition or payments. The reduction in working capital and net assets suggests cash flow pressures or increased outflows relative to inflows in the latest year. Absence of a profit and loss account limits cash flow visibility, but the drop in net assets and current assets warrants caution. Liquidity appears adequate for current operations but flexibility may be limited.

4. Monitoring Points:

• Track quarterly cash flow statements and aging of receivables to ensure timely collections.
• Monitor trends in net current assets and net assets for further deterioration.
• Review directors’ remuneration and related party transactions, given their significant control.
• Assess any changes in deferred income and accruals that might impact liquidity.
• Watch for timely filing of accounts and confirmation statements to avoid governance issues.
• Monitor business development and client retention given the small scale and concentration risk.