Company Number: 13435967

Analysis Date: 2025-07-20 16:39 UTC

1. Credit Opinion: DECLINE
   Sapore Kendal Limited's financial position presents significant credit risk. The company has net liabilities of £266,674 as of 30 November 2023, worsening from a net liability position of £154,630 the previous year. Persistent negative net current assets (£84,301) indicate liquidity constraints. The company's ability to meet short-term obligations is weak, with current liabilities far exceeding current assets. The business is in the licensed restaurant sector, which is sensitive to economic fluctuations and discretionary spending cycles. The reduction in employees from 12 to 4 suggests operational downsizing, possibly due to financial stress. Without evidence of positive cash flow or profitability, the prospects for debt servicing are poor. Therefore, credit approval is not recommended.

2. Financial Strength:
   The balance sheet shows deteriorating financial health. Fixed assets have slightly decreased from £89,351 to £83,247, but this is overshadowed by the large increase in creditors due after more than one year, rising from £226,794 to £265,620. The company’s shareholders’ funds are negative and have worsened by over £100,000 in one year. Negative equity and increasing long-term liabilities indicate the company is highly leveraged and insolvent on a balance sheet basis. The micro-entity accounting regime and lack of profit and loss disclosure limit visibility on profitability but do not negate the balance sheet weakness.

3. Cash Flow Assessment:
   Net current liabilities of £84,301 reflect a working capital deficit, meaning the company lacks sufficient short-term resources to cover current debts. The sharp drop in current assets from £36,489 to £15,363, coupled with rising current liabilities, signals liquidity stress. The company’s reduced workforce and ongoing liabilities suggest cash outflows may exceed inflows, risking default on obligations. No cash or cash equivalents data provided, but the position strongly implies constrained cash flow and limited operational liquidity.

4. Monitoring Points:

• Monitor annual accounts for improvement in net current assets and net liabilities.
• Watch for changes in creditor terms or restructuring of long-term debt.
• Track employee numbers as a proxy for operational scale and cost control.
• Review any trading updates or management commentary signaling turnaround or capital injection.
• Observe timely filing of accounts and returns to assess governance and compliance discipline.