THE EXPERIMENTATION GROUP LTD

Executive Summary

The Experimentation Group Ltd is an early-stage management consultancy with a small asset and equity base and negative working capital reflecting its start-up nature. It currently has limited liquidity and a short trading history, warranting conditional credit approval with stringent monitoring of cash flows and debtor collections. Close attention to operational cash management and financial performance improvements will be critical before considering increased credit facilities.

THE EXPERIMENTATION GROUP LTD - Analysis Report

Company Number: 15267978

Analysis Date: 2025-07-29 17:01 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   The Experimentation Group Ltd is a newly incorporated private limited company (Nov 2023) operating in management consultancy (SIC 70229). Its first set of accounts (period ending Nov 2024) shows modest net assets (£2,563) with a small negative working capital position (£-318). The company is in early stages with limited financial history and a single director/shareholder controlling 75-100% ownership. Given the small scale, limited trading history, and working capital deficiency, credit is recommended on a conditional basis with close monitoring and possibly limited facility size tied to cash flow performance.

2. Financial Strength:
   The company’s balance sheet is very small with total fixed assets at £2,881 and current assets of £25,916, primarily debtors (£20,438) and cash (£5,478). Current liabilities stand at £26,234, leading to a net current liability of £318. Shareholders’ funds are positive but nominal at £2,563, reflecting the initial capital and retained earnings. The financial position is typical of a start-up: low asset base, minimal equity, and current liabilities exceeding current assets. There is no indication of long-term debt, which limits leverage risk but also reflects limited financial resources.

3. Cash Flow Assessment:
   Cash at bank is low (£5,478) relative to current liabilities (£26,234), indicating tight liquidity. The high level of debtors (£20,438) suggests reliance on timely collections to meet obligations. Working capital is negative, which signals potential short-term liquidity constraints. The company’s ability to service debts depends heavily on cash inflows from customers and efficient management of payables. The presence of accrued liabilities and deferred income (£9,063) may indicate some prepayments or advanced receipts supporting cash flow, but overall liquidity is fragile.

4. Monitoring Points:

• Accounts receivable aging and collection efficiency to ensure turnover of debtors into cash.
• Cash flow statements and bank balances to track liquidity trends.
• Changes in current liabilities, especially trade creditors and accrued expenses levels.
• Profitability developments in subsequent accounting periods to build retained earnings and equity.
• Any additional capital injections or credit lines to strengthen working capital.
• Director’s conduct and governance practices given sole control and no audit requirement.