THE CREAM FACTORY LTD

Executive Summary

THE CREAM FACTORY LTD presents a concerning credit profile characterized by a sharp decline in net assets and severely limited working capital. The micro-entity’s balance sheet indicates minimal operational activity and weakening financial strength, raising significant doubts about its ability to meet debt obligations. Without evidence of capital support or improved cash flow, credit approval is not recommended at this time.

THE CREAM FACTORY LTD - Analysis Report

Company Number: 12879691

Analysis Date: 2025-07-29 19:50 UTC

1. Credit Opinion: DECLINE
   THE CREAM FACTORY LTD’s most recent financials reveal a significant deterioration in financial position. Net assets have plummeted from £2,155 in 2023 to just £77 in 2024, indicating a loss of capital and weakening equity buffer. The company has a very limited asset base (£968 current assets) and no employees, which suggests minimal operational scale or growth prospects. Given this sharp decline and minimal working capital, the company poses a high credit risk and currently lacks the financial strength to reliably service debt or meet credit obligations without additional capital support.

2. Financial Strength:
   The balance sheet shows a micro entity with very limited resources. Current assets decreased from £4,300 to £968 year-on-year, while creditors (current liabilities) are not explicitly stated for 2024 but were £1,587 in 2023. The provision for liabilities has increased to £891 in 2024 from £558 in 2023, further eroding net assets. Shareholders’ funds have almost been fully depleted, dropping from £2,155 to £77. This suggests that the company is either incurring losses or writing off liabilities/assets. The lack of fixed assets and no employees also points to a very fragile financial structure.

3. Cash Flow Assessment:
   With only £968 in current assets and no employees generating operational activity, liquidity is extremely tight. Net current assets remain positive but at a very low level, limiting the company’s ability to cover short-term obligations or absorb cash flow shocks. No detailed cash flow statement is provided, but the decline in net assets and increase in provisions imply cash outflows or deteriorating working capital management. The minimal asset base and no workforce raise concerns about generating sufficient cash inflows going forward.

4. Monitoring Points:

• Track quarterly management accounts or interim financials for signs of cash flow improvement or capital injections.
• Monitor any changes in provisions or creditors that may indicate growing liabilities.
• Watch for additional funding rounds or shareholder support to rebuild equity.
• Assess operational developments such as new contracts, sales growth or staffing changes that could improve financial resilience.