Company Number: 14849773

Analysis Date: 2025-07-29 15:53 UTC

1. Credit Opinion: DECLINE. TMK (Leicester) Limited is a newly incorporated private limited company operating in the take-away food sector with its first financial year ended in May 2024. The company reports negative net current assets of £5,919 and negative shareholders’ funds of £1,980, indicating a net deficiency in working capital and equity. The current liabilities exceed current assets by a material amount, suggesting liquidity stress. Given the lack of trading history beyond one year, negative net asset position, and insufficient working capital to cover short-term commitments, the company currently lacks the financial strength and cash flow stability to reliably service credit obligations.

2. Financial Strength: The balance sheet shows total fixed assets net of depreciation at £3,941, primarily plant and machinery, and current assets of £10,300 consisting of cash (£5,800) and debtors (£4,500). However, current liabilities stand at £16,219, resulting in net current liabilities of £5,919. The company’s accumulated retained losses of £1,980 contribute to negative shareholders’ funds, highlighting undercapitalisation. The financial position reflects the early stage of operations with initial investment and startup costs not yet overcome by profitable trading or cash inflows. Overall, the balance sheet is weak and reflects limited financial cushion.

3. Cash Flow Assessment: The cash balance of £5,800 is insufficient to cover the full extent of current liabilities (£16,219), raising concerns about liquidity risk and the ability to meet short-term creditor demands. Debtors amount to £4,500, but their collectability and timing are not detailed, increasing uncertainty in near-term cash inflows. Negative net current assets confirm working capital deficiency. Without evidence of positive cash flow generation or committed external funding, the company’s ability to maintain ongoing operations and repay debt is questionable.

4. Monitoring Points:

• Cash flow and liquidity improvements, especially the ability to generate positive operating cash flow and reduce reliance on short-term creditors.
• Profitability trends over the next 1-2 financial years to move accumulated losses into positive retained earnings.
• Timely submission of future accounts and confirmation statements to confirm ongoing compliance and business activity.
• Any changes or additions to directors or significant shareholders that may impact governance or financial backing.
• Working capital management and evidence of improved net current asset position.