TEMP SOURCE LIMITED

Executive Summary

Temp Source Limited is currently in a precarious financial position with significant negative net assets and heavy reliance on group funding. Liquidity is severely constrained, and the company’s balance sheet shows deteriorating working capital and equity deficits. Given these factors, the risk of credit default is high, and new credit facilities are not recommended without substantial financial restructuring or evidence of operational turnaround.

TEMP SOURCE LIMITED - Analysis Report

Company Number: 13442239

Analysis Date: 2025-07-20 16:18 UTC

1. Credit Opinion: DECLINE
   Temp Source Limited exhibits significant financial distress, marked by a large and growing net current liabilities position (£63,554 negative as of 31 March 2023) and negative shareholders' funds (£63,413 negative). The company relies heavily on amounts owed to group undertakings (£80,937), indicating dependence on related parties for liquidity rather than operational cash flow. Given these weak liquidity and solvency indicators, the company is unlikely to service new debt or credit facilities without improved financial performance or structural changes. The absence of employees and limited fixed assets further constrain operational resilience. Management appears to be addressing governance with multiple directors appointed recently, but financial stewardship has yet to translate into improved financial health.

2. Financial Strength:
   The balance sheet reveals a deteriorating financial position. Total assets less current liabilities are negative (£63,412), and net current assets are deeply negative, signaling poor working capital management. The company’s fixed assets are minimal (£142), indicating little tangible collateral or capital investment. The sizeable creditors balance, predominantly amounts owed to group undertakings, suggests external borrowing within the group rather than independent funding sources. The rapid increase in current liabilities from £7,934 in 2022 to £87,269 in 2023 raises concerns about escalating obligations outpacing asset growth. Share capital remains nominal (£1), and retained losses have mounted, weakening equity and increasing insolvency risk.

3. Cash Flow Assessment:
   Cash at bank is critically low (£798), despite an increase in debtors to £22,917, highlighting potential challenges in converting receivables to cash promptly. The company has no employees, indicating limited operating expenses but also no direct revenue generation capacity from staffing. The negative net current asset position implies working capital deficits, likely straining day-to-day operations. Heavy reliance on intra-group funding suggests cash flow is externally supported rather than internally generated. Without improved debtor collection and reduction in current liabilities, liquidity constraints will persist.

4. Monitoring Points:

• Monitor changes in net current assets and working capital position closely for signs of improvement.
• Watch for any increases in cash reserves or reduction in amounts owed to group undertakings to assess liquidity strengthening.
• Track turnover and profitability metrics once available to evaluate operational viability.
• Review director and related party transactions for any changes affecting financial stability or credit risk.
• Observe filing of future accounts and confirmation statements for timeliness and consistency to gauge management quality and compliance.