TIAN TIAN YOU YU LTD

Executive Summary

TIAN TIAN YOU YU LTD has demonstrated improved financial health in its second full year of trading with positive net assets and working capital. While the company remains small and relatively thinly capitalised, the current liquidity position and sole director control provide a basis for cautious credit approval. Ongoing monitoring of cash flow and working capital will be crucial to ensure sustained creditworthiness.

TIAN TIAN YOU YU LTD - Analysis Report

Company Number: 13814541

Analysis Date: 2025-07-19 11:51 UTC

1. Credit Opinion: APPROVE with caution
   TIAN TIAN YOU YU LTD shows a positive turnaround in its financial position in the latest year, moving from net current liabilities and negative net assets in 2022 to modest positive net current assets (£2,740) and net assets at the end of 2023. The company is small (micro-entity) and operates in the take-away food sector, which can be sensitive to economic fluctuations but is generally resilient if well managed. The sole director and majority shareholder, Mr Minjie Chen, has full control, which simplifies governance but also concentrates risk. Given the limited scale and short trading history, credit facilities should be granted cautiously with limits reflecting the modest asset base and working capital.

2. Financial Strength:
   The balance sheet shows total net assets of £2,740 as of 31 December 2023, up from a negative position in the previous two years. Current assets increased to £4,479, with current liabilities at £1,739, indicating improved liquidity and working capital management. The company has no long-term liabilities disclosed, which reduces financial risk. However, the absolute size of the balance sheet is small, reflecting the micro entity status and limited capitalisation. The positive net assets indicate that the company is solvent at the reporting date.

3. Cash Flow Assessment:
   The net current assets of £2,740 suggest a positive short-term liquidity position, with current assets comfortably exceeding current liabilities. The increase in current assets and reduction in net current liabilities compared to prior years imply better cash management or improved receivables/stock control. The small scale of operations (3 employees) also suggests manageable overheads. However, without a detailed cash flow statement, the sustainability of liquidity depends on consistent trading performance. The company’s ability to service any credit facility will rely on its operating cash inflows and control of payables.

4. Monitoring Points:

• Maintain positive net current assets and watch for any deterioration in working capital, especially during seasonal or economic downturns.
• Monitor profitability and cash flow from operations to ensure the company can meet debt servicing requirements.
• Track any changes in shareholder structure or director appointments that might affect governance and control.
• Review annual accounts filings promptly to detect any emerging financial stress or changes in asset/liability composition.
• Consider sector risks related to the food service industry, including regulatory changes, competition, and consumer demand shifts.