Company Number: 12990808

Analysis Date: 2025-07-20 13:04 UTC

1. Credit Opinion: DECLINE

THE THIRSTY GARDENER LTD exhibits a weakening financial profile with declining net assets and deteriorating working capital over recent periods. The latest accounts (year ending 30 November 2024) show net current liabilities of £966 and a significant drop in total net assets to £1,810 from £4,821 the prior year. This erosion in balance sheet strength indicates increasing financial strain and reduced capacity to service additional debt or meet short-term obligations reliably. The company operates in the unlicensed restaurant and café sector, which can be sensitive to economic fluctuations, further increasing risk. The lack of substantial share capital (£1) and diminishing equity base provide little cushion against adverse events. Given these factors, the company’s ability to repay loans or honor commercial credit agreements is questionable at this time.

2. Financial Strength:

The balance sheet reveals a downward trend in fixed assets and net assets, with fixed assets reducing from £4,748 to £4,036 and net assets dropping drastically from £4,821 to £1,810 within one year. Current liabilities have increased markedly from £1,293 to £3,840, leading to negative net current assets. The company’s working capital position has moved from a positive £1,105 to a negative £966, signaling potential liquidity problems. The accruals and deferred income have increased slightly, suggesting possible timing differences in revenue or expense recognition. Overall, the balance sheet shows weakening financial health and a diminished equity buffer.

3. Cash Flow Assessment:

While direct cash flow figures are not provided, the current assets of £2,874 against current liabilities of £3,840 indicate liquidity pressure. The negative net current assets suggest the company may face challenges in meeting short-term liabilities from available liquid resources. The steady average number of employees (9) implies fixed overhead costs remain steady, but with declining working capital, operating cash flow may be strained. Without adequate cash or liquid assets, the company’s ability to generate sufficient cash inflows to cover debts and operational costs is uncertain.

4. Monitoring Points:

• Net current assets/liabilities and liquidity trends in upcoming accounts.
• Movements in accruals and deferred income to identify revenue recognition or expense timing issues.
• Shareholders’ funds and net asset trajectory to detect further equity erosion.
• Cash flow statements and creditor aging reports to assess real-time liquidity.
• Any changes in director or management that could impact financial strategy.
• Industry sector performance and external economic factors affecting the hospitality sector.