TOUCHSTONE RAIL LTD

Executive Summary

Touchstone Rail Ltd is an early-stage micro-entity with a weak financial position characterized by negative working capital and shareholders’ funds. The company’s cash flow and operational scale are insufficient to support credit exposure, resulting in a high risk of default. Without intervention or significant improvement, credit facilities are not recommended at this time.

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Company Analysis

This analysis is opinion only and should not be interpreted as financial advice.

TOUCHSTONE RAIL LTD - Analysis Report

Company Number: 14121704

Analysis Date: 2025-07-29 17:16 UTC

  1. Credit Opinion: DECLINE. Touchstone Rail Ltd shows a pattern of negative net current assets and shareholders’ funds since incorporation, with worsening working capital deficits year on year. The company is in the early stage of operations (incorporated 2022) and remains loss-making with no employees, indicating limited operational scale. Current liabilities significantly exceed current assets, raising high liquidity risk and inability to meet short-term obligations. Without evidence of new capital injection, improving cash flow, or operational revenues, the company’s capacity to service debt or honour credit agreements is weak.

  2. Financial Strength: The balance sheet reveals persistent net current liabilities (£21,587 as of May 2024, up from £11,592 in prior years). Shareholders’ funds are negative and have deteriorated, reflecting accumulated losses or undercapitalization. The company holds minimal fixed assets and current assets are primarily cash or equivalents (£45,609). The increase in current liabilities (from £11,860 to £67,196) is material and unexplained by asset growth, suggesting mounting creditor pressure or short-term borrowings. Overall, the financial position is fragile with no equity buffer.

  3. Cash Flow Assessment: The company’s cash or equivalents increased from £268 to £45,609, which is positive, but this is overshadowed by a sharp increase in current liabilities. Negative net working capital indicates operating cash flow challenges and potential reliance on external funding to meet liabilities. Absence of employees and lack of reported profits imply limited operating cash inflow. The liquidity risk is high—credit facilities would be exposed to default risk unless secured or guaranteed.

  4. Monitoring Points:

  • Monitor quarterly cash flow statements and debtor/creditor days to assess liquidity trends.
  • Watch for any capital injections or shareholder loans that improve net assets.
  • Track the evolution of liabilities, particularly short-term creditors and borrowings.
  • Review operational developments such as contract wins or hiring that may signal growth.
  • Observe timely filing of accounts and confirmation statements to ensure compliance and transparency.

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