TRADING FLOOR ONLINE LTD

Executive Summary

Trading Floor Online Ltd shows significant financial weakness with negative net assets and working capital deficits as of August 2024. The company’s ability to meet short-term liabilities is compromised, relying increasingly on director loans. Given these factors and the limited operating history, credit approval is not recommended at this stage. Close monitoring of liquidity and management interventions is essential if credit exposure is considered in future.

TRADING FLOOR ONLINE LTD - Analysis Report

Company Number: 14266460

Analysis Date: 2025-07-29 19:35 UTC

1. Credit Opinion: DECLINE
   Trading Floor Online Ltd exhibits significant financial distress as of its latest accounts dated 31 August 2024. The company has net current liabilities of £4,234 and negative net assets of £1,026, indicating an erosion of capital and insufficient short-term liquidity to meet obligations. The doubling of current liabilities from the prior year paired with declining current assets and cash balances raise concerns about the company’s ability to service debt or extend credit. The absence of an income statement (exempt under small company rules) limits profitability insight but the balance sheet deterioration suggests operating losses or cash flow strain. Given this financial position and the company being less than two years old, the credit risk is elevated and repayment capability is doubtful without significant turnaround or external support.

2. Financial Strength
   The balance sheet reveals a weakening financial position. Fixed assets have declined modestly (£3,832 to £3,208), but more concerning is the increase in current liabilities from £3,220 to £6,010, largely outpacing a decrease in current assets from £2,363 to £1,776. This results in net current liabilities and a negative working capital situation, detrimental for ongoing operations. Shareholder funds have moved from a positive £2,491 to a negative £1,126, showing accumulated losses or capital depletion. The director’s loan account is also increasing, with £4,180 owed to the director, which may indicate reliance on insider funding to maintain liquidity.

3. Cash Flow Assessment
   Cash at bank is minimal (£275), although improved from £40 the previous year, but still insufficient to cover current liabilities. Trade debtors have reduced significantly, possibly indicating lower sales or more aggressive collection, but overall current assets are insufficient against payables. Negative net current assets signal liquidity risk, with potential difficulties in meeting short-term debts as they fall due. The company’s operations likely generate negative cash flows or rely on director loans and other financing to fund working capital needs.

4. Monitoring Points

• Liquidity trends: monitor current assets vs current liabilities, especially cash balances.
• Director loan account: track increases and repayment terms for insider funding.
• Filing compliance: ensure timely submission of accounts and returns to avoid penalties.
• Business operational performance: seek evidence of revenue growth or cost control to stabilize financial position.
• Management actions: assess any strategic plans or restructuring aimed at restoring profitability and working capital.