TELEM TREE LIMITED

Executive Summary

Telem Tree Limited demonstrates improving financial health with a strengthened balance sheet and positive working capital after two years of operation. The company’s small scale and outstanding director loans present some risk, warranting conditional credit approval with ongoing monitoring of liquidity and governance. Maintaining filing discipline and obtaining updated cash flow information will be key to managing credit exposure effectively.

TELEM TREE LIMITED - Analysis Report

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.