THE GIFT MONGER LIMITED

Executive Summary

The Gift Monger Limited shows weak liquidity with persistent negative working capital and minimal equity, raising concerns about its ability to meet short-term obligations. Despite a slight improvement in net assets, the company remains financially fragile with limited operational scale and cash flow constraints. Given these factors, credit facilities should be declined unless substantial financial support or turnaround evidence emerges.

THE GIFT MONGER LIMITED - Analysis Report

Company Number: 13888204

Analysis Date: 2025-07-29 20:58 UTC

1. Credit Opinion: DECLINE
   The Gift Monger Limited demonstrates persistent negative working capital and a net current liability position exceeding £140k for the last three years, indicating ongoing liquidity pressures. Despite modest growth in net assets from £1,600 to £2,761, the company’s ability to meet short-term obligations is impaired, which raises significant credit risk. The micro-entity scale and single employee operation further limit operational resilience. Without evidence of strong cash flow generation or external financial support, extending credit would be imprudent.

2. Financial Strength:
   The balance sheet shows stable fixed assets around £150k but current liabilities have consistently outstripped current assets by a large margin (net current liabilities around £-146k for 2024 and 2025). Shareholders’ funds remain very low at under £3k, signalling a weak equity buffer. The company has slowly improved net assets from negative in 2022 to positive but minimal equity as of 2025. This fragile capital structure and ongoing working capital deficit suggest limited financial strength and vulnerability to shocks.

3. Cash Flow Assessment:
   Current liabilities significantly exceed current assets, resulting in negative net working capital. This implies potential cash flow stress and difficulty in meeting immediate payables. The accounts do not disclose cash or equivalents separately, but the overall current asset position (£45k) is insufficient to cover short-term debts of £192k. The company relies on external funding or director support to bridge this liquidity gap. The single-employee structure limits operational scale and cash inflows, increasing dependency on tight management of payables and receivables.

4. Monitoring Points:

• Monitor quarterly cash flow statements and bank balances closely to detect worsening liquidity.
• Track changes in current liabilities and efforts to reduce them or convert short-term debt to longer terms.
• Watch for improvements in working capital cycles (e.g., faster debtor collections, inventory management).
• Review any new financing arrangements or equity injections by the major shareholder.
• Assess director’s financial support and any related party transactions that may affect credit risk.