Company Number: 14114561

Analysis Date: 2025-07-20 16:49 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Telem Tree Limited is a young micro-entity (incorporated in 2022) showing improving financial health with a positive turnaround in net current assets and shareholders' funds over the last financial year. The company has no overdue filings and is actively managed by a director with significant shareholding. However, the overall scale is small, and director loans remain outstanding (interest-free, no set repayment terms), which adds some risk. Approval is recommended with conditions: maintain current filing discipline, monitor director advances closely, and request updated cash flow forecasts before extending credit beyond short-term facilities.

2. Financial Strength:

• Fixed assets are minimal (£13.9k), typical for a micro business with limited capital investment.
• Current assets decreased from £38.7k (FY23) to £30.4k (FY24), but current liabilities fell more sharply from £46.1k to £22.8k, improving net current assets from a negative £7.4k to a positive £7.6k.
• Shareholders' funds nearly quadrupled from £5.4k to £21.5k, indicating equity injection or retained profits, strengthening the balance sheet.
• Overall, the balance sheet shows positive working capital and a modest but improving equity base, which supports short-term creditworthiness.

3. Cash Flow Assessment:

• Net current assets improvement signals better liquidity management.
• However, the director's loan balance remains significant (£10.4k at year-end), which is interest-free and repayable on demand but has no formal repayment schedule, potentially impacting cash availability.
• Average 2 employees indicate low fixed overheads, aiding cash preservation.
• Without audited cash flow statements, liquidity appears adequate but should be validated with management’s projections and bank statements.

4. Monitoring Points:

• Continued management of working capital to sustain positive net current assets.
• Director loan accounts: monitor movements and any repayments to avoid hidden liquidity strains.
• Timely and accurate filing of annual accounts and confirmation statements to maintain transparency.
• Business activity and revenue growth trends given the micro scale.
• Any changes in shareholding or director appointments that may affect control or governance.