THE FONE SIDE LTD

Executive Summary

The Fone Side Ltd is a newly established micro-entity with a modest financial base and negative working capital, presenting short-term liquidity concerns. While management appears stable with a single controlling shareholder, credit exposure should be cautiously managed with conditions focused on improving cash flow and working capital. Ongoing monitoring of financial performance and regulatory compliance will be essential before considering increased credit limits.

THE FONE SIDE LTD - Analysis Report

Company Number: 14832592

Analysis Date: 2025-07-29 20:08 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   The Fone Side Ltd is a recently incorporated micro-entity operating in the repair and retail of communication equipment and tobacco products. The company currently shows a modest net asset base of £3,798 but has net current liabilities of £12,182, indicating short-term liquidity pressure. Given its early stage and limited financial history, credit approval should be conditional on monitoring cash flow improvements and working capital management. The substantial control by a single director/shareholder (Mr Shaziab Qureshi) provides clear accountability but also concentrates risk.

2. Financial Strength:

• Fixed assets are minimal (£16,480), reflecting a light capital investment typical for a micro business.
• Current assets (£25,404) are outweighed by current liabilities (£37,586), resulting in negative net working capital (£-12,182).
• Net assets stand at £3,798, reflecting a thin equity base.
• No long-term liabilities are reported, which limits leverage risk but also indicates limited financing capacity.
• The balance sheet shows early-stage modest capitalization with little buffer against operational fluctuations.

3. Cash Flow Assessment:

• Negative net current assets signal potential difficulties meeting short-term obligations from current operations.
• The company's small scale and limited employee count (2 including directors) suggest low overheads but also limited operational scale to generate surplus cash.
• Absence of audit and reliance on micro-entity reporting standards mean limited insight into profitability and cash flow from operations.
• Close scrutiny of debtor collections, inventory turnover, and creditor terms will be critical to assess liquidity going forward.

4. Monitoring Points:

• Improvement in net current assets and working capital management to reduce liquidity risk.
• Timely filing of annual accounts and confirmation statements to maintain regulatory compliance.
• Cash flow statements and profit & loss data in future filings to evaluate operational cash generation capacity.
• Concentration risk due to single controlling shareholder/director; monitor governance and financial stewardship.
• Industry trends in communication equipment repair and retail sectors, as these are competitive and sensitive to technology cycles.