THE FRIENDLY PAPER CO LIMITED

Executive Summary

The Friendly Paper Co Limited is a micro-entity with stable net assets and positive working capital, demonstrating modest financial strength for its size. However, limited operational history and absence of profit data require cautious credit consideration, recommending conditional approval pending further financial performance evidence. Close monitoring of liquidity and business growth metrics is advised to mitigate credit risk.

THE FRIENDLY PAPER CO LIMITED - Analysis Report

Company Number: 13917205

Analysis Date: 2025-07-29 18:12 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   The Friendly Paper Co Limited shows a stable net asset position with positive net current assets, indicating an ability to service short-term liabilities. However, the company is very young (incorporated 2022), with limited financial history and no reported turnover or profit & loss data available. The absence of employees suggests a micro-business model, likely owner-operated, which may limit scalability and resilience. Given these factors, credit approval is conditional on obtaining further financial performance data to confirm revenue generation and cash flow sustainability. The director’s sole control and active management are positive but should be monitored closely.

2. Financial Strength:
   The balance sheet shows net assets of approximately £40,000 consistently over the last two years, indicating modest but stable equity. Current liabilities decreased from £23,201 in 2023 to £11,442 in 2024, improving liquidity. Current assets have declined from £65,974 to £28,568, which may reflect lower cash or receivables but net working capital remains positive (£40,010). The company carries no long-term debt, which reduces financial risk. Overall, the financial position is sound for a micro entity, but the asset base is small with limited diversification.

3. Cash Flow Assessment:
   The current asset to liability position suggests adequate short-term liquidity. However, the sharp reduction in current assets year-on-year warrants further investigation to understand cash inflows and outflows. The absence of employees and a micro-accounting regime implies low operational overhead but also limited income streams. The company’s ability to generate positive cash flow from operations or external financing is unclear due to lack of P&L disclosure. Working capital management appears adequate but should be validated by cash flow statements or bank references.

4. Monitoring Points:

• Revenue generation and profitability in future accounts filings.
• Changes in current assets composition, especially cash and receivables.
• Any increases in liabilities or introduction of debt facilities.
• Director’s ongoing involvement and any changes in ownership/control.
• Timely filing of accounts and confirmation statements to ensure compliance and transparency.
• Impact of market conditions on specialised design activities (SIC 74100), especially wedding stationery demand trends.