TRU CUTZ STUDIO LTD

Executive Summary

Tru Cutz Studio Ltd is a newly formed micro-entity with a fragile financial position characterized by negative working capital and minimal equity. Its current balance sheet and liquidity constraints indicate insufficient capacity to support new credit facilities at this stage. Close monitoring of cash flow and business growth is essential before reconsidering lending.

TRU CUTZ STUDIO LTD - Analysis Report

Company Number: 14935730

Analysis Date: 2025-07-29 13:57 UTC

1. Credit Opinion: DECLINE
   Tru Cutz Studio Ltd is a recently incorporated micro-entity operating in the hairdressing sector with limited financial history. The company shows minimal net assets (£200) and net current liabilities of £4,827, indicating working capital deficit and liquidity constraints. The negative net current assets position raises concerns about the company’s ability to meet short-term obligations and service any debt. Given the early stage of the business, small size, and weak balance sheet, it is not currently creditworthy for lending without strong external support or guarantees.

2. Financial Strength:
   The balance sheet reflects very limited fixed assets (£5,627) and current assets (£4,933) against current liabilities of £9,760. The net assets of only £200 and total assets less current liabilities of £800 highlight a fragile equity base. The company is heavily reliant on short-term funding and has negative working capital, which suggests vulnerability to cash flow shocks or unexpected expenses. Shareholder funds are minimal and entirely attributable to the sole director/shareholder.

3. Cash Flow Assessment:
   Current liabilities exceed current assets by nearly £5,000, indicating negative working capital and potential liquidity stress. The business has only one employee (the director) and no audit exemption applies, limiting financial transparency. No cash flow statement is available, but the balance sheet position suggests limited cash reserves to cover operational needs or debt repayments. Without evidence of strong cash inflows or external financing, the company is at risk of short-term cash shortages.

4. Monitoring Points:

• Monitor liquidity and working capital closely, especially current assets versus liabilities.
• Watch for improvements in net assets and equity through retained earnings or capital injection.
• Track trading performance as the company scales past the first year to assess revenue and profitability trends.
• Review director advances, dividend payments, and any related-party transactions for financial prudence.
• Keep an eye on overdue filings or changes in company status that might signal operational difficulties.