UTOPIA ENTERTAINMENT LTD

Executive Summary

Utopia Entertainment Ltd is a start-up micro company with a weak financial position evidenced by negative net assets and working capital deficit after its first year. The lack of profitability, limited asset base, and liquidity shortfall make it unsuitable for credit facilities at this stage. Careful monitoring of cash flow and capital injections is essential before reconsidering credit support.

UTOPIA ENTERTAINMENT LTD - Analysis Report

Company Number: 15217459

Analysis Date: 2025-07-29 12:09 UTC

1. Credit Opinion: DECLINE
   Utopia Entertainment Ltd is a newly incorporated micro-entity with only one year of trading history. Its latest financials show net current liabilities of £1,029 and negative net assets of the same amount, indicating an immediate working capital deficit and technically insolvent balance sheet. There is no evidence of profitability or cash reserves to service debt obligations. The company’s short operating history and weak financial position present a high credit risk.

2. Financial Strength:
   The company’s balance sheet shows total current assets of £6,171 against current liabilities of £7,200, resulting in negative net current assets of £1,029. Total net liabilities equal £1,029, and shareholders' funds are negative, reflecting accumulated losses or startup costs not yet overcome. The company’s micro classification and small employee base of 3 further limit its financial capacity. Absence of fixed assets or other long-term investments restricts collateral availability.

3. Cash Flow Assessment:
   With current liabilities exceeding current assets, the company faces liquidity pressure. Negative working capital suggests difficulty in meeting short-term obligations without additional funding. There are no disclosed cash or cash equivalents explicitly stated, and no profit reserves to buffer cash flow variability. Given the business is in the "Other amusement and recreation activities" sector, cash flow may be seasonal and unpredictable, heightening risk.

4. Monitoring Points:

• Quarterly review of cash flow forecasts to ensure timely payment of liabilities.
• Watch for improvements in net current assets and positive cash generation.
• Monitor any new capital injections or shareholder loans to support liquidity.
• Track revenue growth and profitability trends in subsequent accounts.
• Keep an eye on director changes or any unusual related-party transactions.

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