THE KEG SHACK LIMITED

Executive Summary

THE KEG SHACK LIMITED is currently financially strained with negative net assets and insufficient liquidity to cover short-term debts. The company’s financial trajectory is declining, raising concerns about its ability to service credit facilities. Without operational or financial restructuring, credit exposure presents high risk and is not recommended for approval at this stage.

THE KEG SHACK LIMITED - Analysis Report

Company Number: SC685994

Analysis Date: 2025-07-29 16:16 UTC

1. Credit Opinion: DECLINE
   THE KEG SHACK LIMITED exhibits weakening financial health, with net liabilities reported at £325 as of January 2024, a deterioration from positive net assets in prior years. The company's current liabilities significantly exceed current assets, resulting in negative working capital of £10,515. This indicates liquidity stress and potential difficulty in meeting short-term obligations. Additionally, the company has a small capital base (£100 share capital) and operates in a wholesale alcoholic beverages sector which can be competitive and sensitive to economic cycles. The sole director’s background as a nursery teacher suggests limited industry-specific financial management experience. Overall, the risk of default is elevated and the company’s ability to service debt is questionable without additional financial support or operational improvements.

2. Financial Strength:
   The balance sheet reveals total fixed assets of £19,000 stable over two years, but current assets have only modestly increased to £24,400 from £128, insufficient to cover current liabilities of £34,915. Moreover, there is a long-term creditor balance of £8,910, pushing total liabilities beyond asset coverage. Shareholders’ funds have fallen from £100 to a negative £325, reflecting accumulated losses. The persistent negative net current assets and declining net worth highlight weak financial resilience and capital erosion.

3. Cash Flow Assessment:
   Negative working capital and the increase in current liabilities from £6,075 to £34,915 over one year suggest cash flow constraints. The limited current assets and negative net current assets imply the business may struggle to meet short-term creditor demands without refinancing or cash injections. The absence of audit and detailed cash flow statements limits visibility, but the balance sheet trends suggest inadequate liquidity and working capital management.

4. Monitoring Points:

• Monitor improvement in net current assets and reduction of short-term liabilities.
• Watch for operational cash flow generation or external financing to support liquidity.
• Track any changes in director appointments or management expertise relevant to financial control.
• Observe industry market conditions impacting wholesale alcoholic beverage sales.
• Review subsequent filings for signs of stabilization or further deterioration in net assets.