THREADING STATION LIMITED

Executive Summary

Threading Station Limited demonstrates improving net assets and adequate liquidity for its micro-entity size, but substantial director advances pose a potential cash flow risk. Credit approval is recommended with conditions to monitor director-related receivables and continued financial performance. The company’s small capital base and limited asset base require careful oversight to ensure credit risk remains low.

THREADING STATION LIMITED - Analysis Report

Company Number: 12507940

Analysis Date: 2025-07-29 18:59 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Threading Station Limited is a micro-entity operating in the hairdressing and beauty treatment sector since 2020. The company shows a modest but improving financial position, with net assets increasing from £200 in 2023 to £5,587 in 2024. However, advances to directors totaling approximately £8,673 are recorded as receivables, which may indicate inter-company financial reliance or informal cash flow management. The absence of fixed assets and relatively low overall asset base suggest limited collateral. The company is active with no overdue filings and has a stable director structure. Credit approval is recommended with conditions including monitoring director advances and requiring updated financial statements to confirm continued positive trends.

2. Financial Strength:
   The balance sheet shows no fixed assets, current assets of £10,626 mainly comprising cash or equivalents, and current liabilities of £5,039, resulting in net current assets of £5,587. Shareholders’ funds match net assets at £5,587, reflecting retained earnings or capital contributions. The company’s equity base is small but positive and growing, showing modest capitalisation. The lack of long-term liabilities or debt is a positive indicator, reducing financial risk. The increase in net assets from prior years represents improving financial health, but the overall scale remains small, consistent with micro-entity status.

3. Cash Flow Assessment:
   Current assets exceed current liabilities by a factor of approximately 2:1, indicating adequate short-term liquidity to meet obligations. However, advances to directors recorded as receivables (circa £8,673) are interest-free with no fixed repayment terms, which could impair cash availability if these funds are not promptly recovered. The company employs 2 staff on average, suggesting limited payroll burden. While liquidity appears sufficient, working capital management should be scrutinized, especially regarding director-related transactions.

4. Monitoring Points:

• Track director advances and ensure repayment or formalisation of terms to avoid liquidity strain.
• Monitor future profitability and cash flow generation to support operational and debt servicing capacity.
• Watch for any growth in liabilities or overdue filings that may indicate financial stress.
• Review management’s ability to maintain and grow the business given limited fixed assets and capital base.
• Confirm ongoing compliance with filing deadlines and no adverse changes in director conduct or company status.