TWL MUSIC LIMITED

Executive Summary

TWL Music Limited is a micro-entity with weak liquidity and minimal equity, showing increasing net current liabilities and declining current assets over recent years. The company’s financial position raises concerns about its ability to service debt or new credit, leading to a credit decline recommendation. Close monitoring of liquidity metrics and operational cash flow is essential to reassess creditworthiness in the future.

TWL MUSIC LIMITED - Analysis Report

Company Number: 13558445

Analysis Date: 2025-07-29 19:11 UTC

1. Credit Opinion:
   DECLINE. TWL Music Limited exhibits persistent net current liabilities and minimal net assets, indicating weak short-term liquidity and a fragile financial base. The company’s working capital position has deteriorated year-on-year, with current liabilities consistently exceeding current assets by a substantial margin. Given the micro-entity status and limited financial scale, the ability to service any new or existing credit obligations is highly questionable without external support or capital injection.

2. Financial Strength:
   The balance sheet shows fixed assets increasing modestly from £31,206 in 2021 to £45,047 in 2024, which is positive but small in absolute terms. However, current assets have declined sharply from £43,838 in 2023 to £17,275 in 2024, while current liabilities remain high (£61,888 in 2024). As a result, net current liabilities have worsened from £33,880 negative in 2023 to £44,613 negative in 2024. Shareholders’ funds remain negligible (£434 in 2024), reflecting minimal equity buffer and indicating the company is barely solvent on a net asset basis.

3. Cash Flow Assessment:
   The company’s negative net working capital signals strained liquidity and potential difficulties meeting short-term obligations. The sharp reduction in current assets, particularly cash or receivables, suggests limited cash inflows or possible collection issues. With only one employee and a micro-entity footprint, operational cash generation capacity is limited. The absence of audited accounts restricts visibility on cash flow from operations, but the balance sheet trend implies negative or insufficient cash flow.

4. Monitoring Points:

• Monitor net current assets and working capital trends closely. Any further increase in current liabilities or reduction in current assets would heighten credit risk.
• Observe cash balances and receivables aging to assess liquidity and collection efficiency.
• Track profitability and retained earnings development once available to determine if operational improvements can strengthen equity.
• Review director’s statements or management commentary on funding plans or external financing arrangements.
• Watch for any overdue filings or changes in company status that could signal operational distress.