Company Number: 13521870

Analysis Date: 2025-07-20 14:30 UTC

1. Credit Opinion: CONDITIONAL APPROVAL

Tatama Coffee Ltd is a micro-entity operating in the food services and wholesale coffee sector since 2021. The latest financials show a slight deterioration in net assets, moving from a positive £387 in 2023 to a negative £487 in 2024, driven primarily by increased accruals/deferred income and elimination of long-term creditors. The company maintains positive net current assets (£1,113), indicating short-term liquidity is adequate. However, the negative net assets and shareholders’ funds highlight an erosion of equity, which poses some risk. Given the company’s small size, early stage, and limited financial history, credit approval should be conditional on continued monitoring of profitability and working capital management.

2. Financial Strength

• Net current assets remain positive and stable (£1,113 in 2024 vs £1,187 in 2023), showing the company can cover its short-term liabilities.
• Net assets have declined into negative territory (£-487), mainly due to increased accruals (£1,600 vs £600 prior year) and the absence of long-term creditors (previously £200).
• Fixed assets have been reduced to zero in 2024 from a prior balance of £4,463 at incorporation, indicating possible disposal or full depreciation.
• Shareholders' funds reflect the negative net asset position, which reduces the buffer against financial stress.
• The capital structure shows sole control by a director with significant shareholding, which may imply limited external financial backing.

3. Cash Flow Assessment

• Current assets are predominantly cash and receivables (£11,127), which cover current liabilities (£10,014) comfortably.
• The positive net working capital position supports ongoing operational liquidity.
• The increase in accruals and deferred income could reflect timing differences in revenue recognition or expenses.
• The small scale with only two employees suggests low fixed overheads, which limits cash burn risk.
• No audit was performed, so cash flow quality relies on unaudited management reports.

4. Monitoring Points

• Net asset position and shareholders’ funds trend: watch for recovery from negative equity.
• Accruals and deferred income growth: ensure these are not masking underlying cash flow issues.
• Profitability and revenue growth: verify if the company can improve earnings to strengthen reserves.
• Debtor days and liquidity ratios: monitor working capital efficiency as this underpins short-term repayment ability.
• Director involvement and any changes in control or financial support from shareholders.