TRADITIONAL FIRST CLASS BARBERS LTD

Executive Summary

Traditional First Class Barbers Ltd is currently financially distressed, exhibiting increasing net liabilities and poor liquidity. The company's ability to service debt and meet short-term obligations is highly questionable without additional capital or operational improvements. Credit facilities are not recommended at this stage due to the elevated risk of default and insufficient financial strength.

TRADITIONAL FIRST CLASS BARBERS LTD - Analysis Report

Company Number: 14848400

Analysis Date: 2025-07-29 17:08 UTC

1. Credit Opinion: DECLINE
   Traditional First Class Barbers Ltd shows persistent and worsening negative net assets and net current liabilities over the last two financial years. The company is a micro-entity with minimal fixed assets and significantly negative working capital, indicating poor liquidity and inability to meet short-term obligations without external support. The financial trajectory is negative, with net liabilities increasing from £6,185 in 2024 to £8,679 in 2025. The company’s cash flow position is weak, and no profit and loss data is available, which limits visibility on profitability. Given the current balance sheet weakness and lack of trading history beyond two years, the risk of default on credit facilities is high. Without evidence of turnaround plans, additional capital injection, or improved cash flow, credit approval is not advisable.

2. Financial Strength:
   The balance sheet reveals low fixed assets (£7,265 in 2025) and substantial negative net current assets (£-15,944), driven by negative current assets (£-9,719) and current liabilities of £6,225. The company’s net liabilities position reflects accumulated losses or shareholder withdrawals not yet offset by equity injections. Shareholders’ funds are negative, indicating insolvency on a balance sheet basis. The micro-entity classification limits detailed financial disclosures, but the negative equity confirms financial distress.

3. Cash Flow Assessment:
   Current assets are negative, suggesting either customer receivables below creditor balances or accounting treatment that results in net liabilities. The company likely faces cash flow constraints, unable to cover short-term liabilities. With only three employees and minimal fixed assets, operational cash burn is presumably low but insufficient to reverse the negative working capital. There is no indication of cash reserves or positive operational cash flow to sustain ongoing obligations.

4. Monitoring Points:

• Quarterly updates on cash flow and working capital improvements
• Any additional capital injections or shareholder loans
• Profit and loss reporting to track operational performance
• Director changes and their impact on company governance and financial policies
• Timely filing of accounts and confirmation statements to avoid regulatory risks