THE CIRCLE BAR LTD

Executive Summary

The Circle Bar Ltd is a small, early-stage hospitality business with a modest balance sheet and limited cash reserves. It demonstrates basic financial stability but operates with narrow liquidity and equity buffers. Credit approval is recommended on a conditional basis with ongoing financial monitoring to mitigate typical micro-entity and sector risks.

THE CIRCLE BAR LTD - Analysis Report

Company Number: 14111031

Analysis Date: 2025-07-29 15:55 UTC

1. Credit Opinion:
   CONDITIONAL APPROVAL. The Circle Bar Ltd is a recently incorporated private limited company operating in the hospitality sector (public houses and licensed restaurants). Its financial statements show modest net assets (£4,260) and positive working capital (£1,850) as at 31 May 2024. However, the company is small, with limited fixed assets and cash reserves, reflecting typical early-stage operations. While there is no adverse filing history or director disqualifications, the company’s liquidity buffer is narrow, and cash flow visibility is limited. Approval is recommended with conditions including regular financial monitoring and limits on credit exposure to mitigate risk associated with small scale and sector volatility.

2. Financial Strength:
   The company’s balance sheet at 31 May 2024 shows tangible fixed assets of £2,410 (net of depreciation), current assets of £1,850 (including £850 cash), and no current liabilities disclosed in the latest filing, resulting in net current assets of £1,850 and shareholders’ funds of £4,260. Compared to the prior year, net assets have decreased from £6,087, indicating slight erosion of equity, possibly due to operating losses (profit and loss account balance is positive but small). The small asset base and low equity mean financial strength is fragile but acceptable for a micro-entity. The company’s filing category (Total Exemption Full) and compliance with small companies regime suggest streamlined accounting but limited financial detail.

3. Cash Flow Assessment:
   With cash at bank recorded at £850 and inventories of £1,000, current assets cover short-term needs but provide minimal liquidity cushion. The absence of current liabilities in the latest filing is positive but may also reflect timing or incomplete disclosure at this early stage. The company employs an average of 2 staff, indicating low fixed overheads but also limited scale. Given the hospitality industry’s exposure to economic cycles and seasonality, the company’s working capital position is tight. Care should be taken to ensure ongoing cash inflows from operations or equity injections to avoid cash flow stress.

4. Monitoring Points:

• Regular review of updated management accounts and cash flow forecasts, particularly through peak and off-peak trading periods.
• Watch for any overdue filings or changes in director status that may indicate governance issues.
• Monitor profitability trends and any material changes in working capital or debt obligations.
• Assess impact of market conditions (e.g., consumer demand, regulatory changes) on trading performance.
• Confirm any additional borrowing or credit facilities to ensure they do not overleverage the company.