TECHLAB5 LIMITED

Executive Summary

TECHLAB5 LIMITED is a newly formed micro-entity with modest financials and limited operating history. While it currently holds positive net assets, the negative working capital position presents short-term liquidity risk. Credit approval is recommended on a conditional basis with tight exposure limits and close monitoring of cash flow and liquidity metrics going forward.

TECHLAB5 LIMITED - Analysis Report

Company Number: SC760895

Analysis Date: 2025-07-20 15:17 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   TECHLAB5 LIMITED is a very recently incorporated micro-entity with limited financial history. The company shows positive net assets (£2,463) and some working capital (£6,619), but current liabilities exceed current assets, indicating a liquidity mismatch. The company operates in retail sales of mobile phones, a competitive but potentially cash-generative sector. The sole director and 75-100% shareholder, Mr Abbas Zaman, appears committed and in control. Given the early stage of the business and modest financial metrics, credit should be extended cautiously with limits aligned to their size and regular monitoring.

2. Financial Strength:
   The balance sheet is very modest, typical for a micro-entity in its first financial year. Fixed assets stand at £9,082, likely representing initial equipment or inventory, with current assets at £20,429 mainly cash or receivables. Current liabilities are higher at £27,048, creating a net current liability of £6,619, which is a weakness and implies short-term obligations exceed readily available assets. Net assets and shareholders’ funds are positive but minimal (£2,463), indicating limited capital buffer and financial strength.

3. Cash Flow Assessment:
   Working capital is negative (£6,619), suggesting potential short-term liquidity pressure. Although the company has current assets, the higher level of current liabilities may strain cash flows, especially if receivables are delayed or inventory turnover slows. No P&L or cash flow statements are provided, but the micro-entity status and small scale imply limited operating cash flow. Close attention to liquidity management is advised to ensure timely payment of short-term debts.

4. Monitoring Points:

• Liquidity ratios and working capital trends in subsequent accounts to assess improvement or deterioration.
• Receivables and payables ageing to confirm cash conversion cycle efficiency.
• Profitability development as the business matures beyond its first year.
• Any increase in leverage or significant capital expenditure that could pressure cash flows.
• Director’s compliance with filing deadlines and corporate governance standards.