THOMAS GRAHAM LIBRARY LIMITED

Executive Summary

Thomas Graham Library Limited exhibits a highly leveraged balance sheet with significant fixed assets offset by long-term liabilities and minimal equity. While operational scale is small and working capital is slightly negative, the company’s financial strength is weak, requiring conditional credit approval with further scrutiny of cash flow and funding sources. Ongoing monitoring of liquidity and leverage metrics is essential to manage credit risk effectively.

THOMAS GRAHAM LIBRARY LIMITED - Analysis Report

Company Number: SC677447

Analysis Date: 2025-07-29 16:28 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Thomas Graham Library Limited is an active micro private limited company operating in the library activities sector. The company holds significant fixed assets (~£946.5k), likely representing property or infrastructure of the library, but carries substantial long-term liabilities (~£945k). The net asset position is marginally positive (£5.7k) but shows minimal equity buffer. The presence of creditors due after more than one year almost equals fixed assets, indicating high leverage. The company has no employees and limited current liabilities, suggesting operational activities may be limited or volunteer-based. Given the high gearing and minimal net assets, credit extension should be conditional upon receipt of additional cash flow information or guarantees to support servicing of liabilities.

2. Financial Strength:
   The balance sheet shows substantial fixed assets consistently over three years (~£950k), demonstrating investment in tangible assets. Current assets are modest (~£32.7k), while current liabilities have increased to ~£39.8k, resulting in a small net current liability position for the latest year, unlike the previous year which had net current assets. Long-term creditors (~£945k) nearly offset fixed assets, indicating the company is highly leveraged with little equity cushion (net assets of £5.7k). The capital structure is weak with equity only marginally positive, pointing to limited financial strength and vulnerability to adverse changes in asset values or income flows.

3. Cash Flow Assessment:
   The company’s working capital is slightly negative at the latest year-end, which could constrain liquidity. The lack of employees suggests minimal payroll obligations, which reduces fixed overheads. However, current liabilities exceed current assets and prepayments are nil, indicating limited short-term liquidity. The company’s ability to service the significant long-term liabilities is unclear without cash flow statements or profit & loss data, which are not provided. The presence of a newly appointed Chartered Accountant director may improve financial management. Additional information on income sources (e.g., grants, donations) and cash flow projections are recommended to assess repayment capacity.

4. Monitoring Points:

• Monitor net asset position and leverage closely, especially any changes in fixed asset valuations or creditor terms.
• Track current ratio and working capital trends to ensure liquidity remains adequate to meet short-term obligations.
• Review cash flow statements or management accounts periodically to confirm ongoing ability to service debt.
• Observe any changes in director appointments for signs of management stability or financial stewardship.
• Assess impact of any new funding, grants, or donations that could enhance financial resilience.