Company Number: 12523987

Analysis Date: 2025-07-19 12:54 UTC

1. Credit Opinion: APPROVE
   Studio Ellis Ltd demonstrates solid financial growth with increasing net assets and net current assets over recent years. The company’s ability to maintain positive working capital and improve equity indicates sound financial management. There are no overdue filings or insolvency concerns, and directors have stable control. The wholesale clothing sector may face competitive pressures, but current financials show good resilience and capability to meet debt obligations.

2. Financial Strength:
   The balance sheet reveals steady improvement from a net asset deficit of £7,942 in 2020 to £604,607 in 2024, reflecting consistent profitability or capital injections. Fixed assets remain modest at £18k, indicating limited capital intensity. Current assets grew to over £1 million, driven largely by debtors (£815k) and stock (£172k), comfortably covering current liabilities (£460k). Shareholders’ funds constitute the entire net asset base, implying no long-term debt, reducing financial risk.

3. Cash Flow Assessment:
   Cash holdings at £61,812 are relatively low versus debtors, suggesting reliance on receivables conversion for liquidity. However, net current assets of £588,683 indicate healthy working capital. The increase in trade creditors (£143k) is manageable relative to trade debtors (£238k). The company's positive working capital and absence of long-term creditors or external borrowings support good short-term liquidity and operational cash flow sufficiency.

4. Monitoring Points:

• Debtor collection efficiency and ageing profile, given the high debtor balance relative to cash.
• Stock turnover and obsolescence risk given increased inventory levels.
• Taxation and social security liabilities, which remain significant (£210k).
• Continued profitability trends as income statement details are not provided (income growth, margins).
• Any changes in sector dynamics affecting wholesale clothing demand.