THE WRIGHT CUT LTD

Executive Summary

The Wright Cut Ltd exhibits weak financial health with negative net assets and a significant working capital deficit shortly after incorporation. Its minimal cash reserves and high current liabilities suggest limited capacity to meet short-term obligations, posing a high credit risk. Without evidence of operational improvement or capital support, credit approval is not recommended at this stage.

THE WRIGHT CUT LTD - Analysis Report

Company Number: 14722612

Analysis Date: 2025-07-20 14:50 UTC

1. Credit Opinion: DECLINE
   The Wright Cut Ltd is a newly incorporated private limited company operating in hairdressing and beauty treatments. The latest unaudited abridged accounts show a significant net current liability position (£-13,594) and negative shareholders’ funds of £-11,260 as at 31 March 2024, indicating an undercapitalised and financially weak position. The company’s cash balance is minimal (£484), and current liabilities (£14,078) far exceed liquid assets, raising concerns about its ability to meet short-term obligations. Without a track record, positive profitability, or working capital cushion, the risk of non-payment is high. Management appears to be a sole director/owner with no employees, limiting operational resilience. Given these factors, the company is not currently creditworthy for lending or trade credit without significant security or guarantees.

2. Financial Strength
   The balance sheet reflects weak financial health. Tangible fixed assets (£2,434 net) are insufficient to cover the current liabilities of £14,078. The company has a net deficit in net assets of £11,160, driven by accumulated losses (retained earnings at £-11,260). The lack of equity capital and negative net current assets imply reliance on external funding or director support to sustain operations. The absence of employees suggests a small operational scale but also indicates limited capacity for revenue generation to improve the financial position. Overall, the company’s capital structure is fragile with no visible buffer against financial shocks.

3. Cash Flow Assessment
   Cash at bank is only £484, which is inadequate to cover current liabilities due within one year. Negative net current assets highlight a working capital deficit, indicating poor liquidity management and potential cash flow difficulties. The company’s cash flow from operations is not disclosed, but the low cash balance and large creditors suggests ongoing liquidity strain. Without additional capital injections or improved cash inflows, the company may struggle to settle short-term debts on time. This raises concerns over operational continuity and supplier payment reliability.

4. Monitoring Points

• Monitor improvements in working capital and cash balances in subsequent filings.
• Track profit generation and movement in retained earnings to assess if losses are being reversed.
• Review any changes in director or shareholder equity contributions to strengthen capital.
• Observe any increase in current liabilities or overdue payments that may indicate worsening liquidity.
• Check for filing compliance and timely submission of accounts and confirmation statements to avoid regulatory risks.