SUN & EM LTD

Executive Summary

SUN & EM LTD demonstrates significant liquidity and solvency weaknesses with a growing working capital deficit and minimal equity. The company’s financial position raises concerns about its ability to meet short-term obligations and sustain operations without external support. Given the current financials and lack of operational scale, credit facilities should be declined until material improvements in cash flow and net assets are evidenced.

SUN & EM LTD - Analysis Report

Company Number: 13499108

Analysis Date: 2025-07-29 18:48 UTC

1. Credit Opinion: DECLINE. SUN & EM LTD shows a weak financial position with negative net current assets for the latest two years and very small net assets (£4,260 in 2024). The company’s working capital deficit worsened from -£119,447 in 2023 to -£188,046 in 2024, indicating liquidity stress and potential difficulty in meeting short-term obligations. The decline in net assets from positive to marginally positive after a prior negative position reflects financial instability. The company is also a micro entity with no employees, limiting operational scale and resilience. Lack of profitability data and significant creditor balances raise concerns about ongoing viability and debt servicing capacity.

2. Financial Strength: The balance sheet reveals increased fixed assets (£192k) but severely negative net current assets, mainly due to high current liabilities (£200k) exceeding current assets (£12k). The company’s net assets remain minimal, suggesting limited equity buffer. No long-term liabilities or provisions are noted, but the working capital deficit is critical. The micro-entity status and absence of an audit reduce financial transparency. The company’s financial trajectory is negative, with total net assets decreasing sharply from £109k in 2022 to just £4k in 2024. This indicates erosion of capital and potential solvency risks.

3. Cash Flow Assessment: With current liabilities vastly exceeding current assets, liquidity is highly constrained. The company likely relies on short-term financing or creditor funding to operate. No cash or cash equivalents are disclosed separately, and the reduction in current assets from £41k to £12k implies cash depletion. The absence of employees suggests limited operational cash outflows but also minimal revenue generation. Without robust cash flow or working capital, the ability to service debts and meet payment terms is doubtful.

4. Monitoring Points:

• Track changes in net current assets and current liabilities to detect worsening liquidity.
• Monitor any changes in directors or ownership that might affect governance or financial strategy.
• Watch for late or overdue filings signaling operational or compliance stress.
• Assess any new credit facilities or guarantees that might improve working capital.
• Review subsequent financial statements for improvements in profitability, cash flow, and equity.