TREEHOUSE SALES AND MARKETING LTD

Executive Summary

Treehouse Sales and Marketing Ltd exhibits significant financial distress evidenced by negative net assets and working capital deficiency as at August 2024. The company’s current liabilities exceed current assets by a substantial margin, indicating liquidity concerns and weakened ability to meet debt obligations. Without clear signs of improved profitability or cash flow, this company poses a high credit risk and is not recommended for credit extension at this time.

TREEHOUSE SALES AND MARKETING LTD - Analysis Report

Company Number: 13574443

Analysis Date: 2025-07-20 11:34 UTC

1. Credit Opinion: DECLINE

Treehouse Sales and Marketing Ltd shows significant financial distress as of the most recent accounts (year ended 31-08-2024). The company reports net liabilities of £35,320, indicating negative shareholders’ funds and erosion of equity. The balance sheet shows current liabilities (£88,750) exceeding current assets (£59,576) by a large margin, resulting in a negative net current asset position of -£29,174. Additionally, the company has long-term creditors of £15,450 and provisions of £1,220, compounding the negative net asset position. The sharp deterioration from previous years (where net assets were positive but minimal) suggests recent losses or financial strain. Without evidence of sustained profitability or positive cash flows, the company’s ability to service debt and meet obligations is doubtful.

2. Financial Strength:

• The company holds modest tangible fixed assets (£10,524) relative to its liabilities.
• Current assets are mainly cash (£50,902) and debtors (£8,674), but current liabilities surpass these, showing working capital deficiency.
• The equity base is negative (-£35,320), indicating accumulated losses absorbed the initial capital.
• The presence of creditors due after one year (£15,450) adds to financial commitments.
• The company's financial trajectory is negative, with a significant decline in net assets from £60 in 2023 to -£35,320 in 2024.
• The company is categorized as a small private limited company but is showing signs of distress uncommon for this category.

3. Cash Flow Assessment:

• The company holds cash of approximately £50k, which on face value should provide some liquidity buffer.
• However, current liabilities are £88,750, exceeding current assets, indicating potential short-term liquidity stress.
• Debtor levels have increased compared to previous years but remain moderate.
• Negative net current assets and overall negative equity suggest cash flows from operations may be insufficient to cover obligations.
• Absence of income statement details limits full cash flow analysis, but the balance sheet position points to operational or financial difficulties impacting cash flow.

4. Monitoring Points:

• Monitor timely payment of short-term liabilities to avoid default.
• Watch future trading performance and profitability to assess if equity can be restored.
• Review cash flow statements and bank balances regularly to detect liquidity risks.
• Observe director and shareholder actions, especially given concentration of control with Miss Sarah Marie Tingling.
• Track any changes in credit terms or supplier relationships due to financial weakness.
• Monitor any new funding or capital injections that might improve financial health.
• Watch for signs of insolvency proceedings given the negative net asset position.