TRUE NORTH (SCOTLAND) LIMITED

Executive Summary

True North (Scotland) Limited is an active micro-entity in management consultancy with increasing staff but deteriorating liquidity and net assets as of June 2024. The company’s working capital deficit and low equity suggest financial vulnerability, warranting conditional credit approval pending assurances on cash flow stability. Close monitoring of liquidity metrics and management actions is recommended to mitigate credit risk.

TRUE NORTH (SCOTLAND) LIMITED - Analysis Report

Company Number: SC682469

Analysis Date: 2025-07-29 20:32 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   True North (Scotland) Limited shows signs of operational activity and growth in staff headcount; however, the latest financials reveal a significant deterioration in liquidity and net current assets turning negative. The company's ability to service short-term obligations appears strained as current liabilities have more than doubled since November 2023, surpassing current assets. Given this weakening working capital position and low net assets, credit approval should be conditional upon assurances regarding cash flow management or external support. Close monitoring of liquidity is essential before extending or increasing credit facilities.

2. Financial Strength:
   The balance sheet reflects micro-entity scale with minimal fixed assets (£7,935) and very low equity (£1,726 as of June 2024) compared to prior periods (net assets were £33,174 in November 2023). The sharp decline in net assets over the last 7 months suggests possible losses or distributions exceeding profits. The company’s small share capital (£23.53) indicates limited capital buffer. While the company has grown its workforce from 3 to 4 employees, the increase in current liabilities to £231,336 from £106,519 raises concerns about rising short-term debt or payables. Overall, the financial strength is weak and vulnerable.

3. Cash Flow Assessment:
   Negative net current assets (-£6,209) as of June 2024 imply working capital deficiency, meaning current liabilities exceed current assets, which compromises liquidity and operational flexibility. The doubling of current liabilities in a short period without a proportional increase in current assets indicates potential cash flow stress. The absence of a profit and loss statement limits insight into operational cash generation, but the balance sheet trend is unfavorable. The company’s ability to meet immediate obligations without additional funding or credit lines appears impaired.

4. Monitoring Points:

• Monitor quarterly updates on current assets vs. liabilities to detect liquidity recovery or further deterioration.
• Track profitability and cash flow statements once available to understand operational performance.
• Review management actions regarding debt restructuring or capital injection.
• Watch for any delays in filing future accounts or confirmation statements which may indicate operational stress.
• Keep an eye on changes in director appointments or significant control that could affect governance or financial strategy.