Company Number: 13680124

Analysis Date: 2025-07-29 18:02 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   We Are Tradition Ltd is a micro-entity operating in the building completion and carpentry sector with a very small scale of operations (2 employees). The company shows positive net assets but has consistent negative net current assets over the last two years, indicating working capital pressure. The net assets halved from £21,249 in 2022 to £9,366 in 2023, reflecting a decline in financial strength. Given the limited scale, negative working capital, and lack of detailed profit & loss data, credit approval is conditional on close monitoring of cash flow and receivables management. The director holds full ownership and control, which supports decision-making but also concentrates risk.

2. Financial Strength
   The balance sheet shows fixed assets of £24,824 and current assets of £19,869 as of 2023, against current liabilities of £37,675, resulting in net current liabilities of £15,243. The decline in net assets from £21,249 to £9,366 within one year signals erosion of equity, possibly due to operating losses or increased liabilities. The company has minimal share capital (£100), which limits its capital buffer. Overall, the financial position is weak with low liquidity and declining equity, suggesting limited resilience to adverse economic conditions.

3. Cash Flow Assessment
   Negative net current assets indicate potential liquidity constraints; current liabilities exceed current assets by over £15k. The company’s ability to meet short-term obligations may be strained without additional working capital or improved cash collections. The small scale and limited staffing reduce fixed overheads, but cash flow volatility could impact debt servicing. No explicit cash balances or operating cash flow figures are provided, so liquidity risk should be considered moderate to high.

4. Monitoring Points

• Track quarterly cash flow and working capital trends to detect worsening liquidity.
• Monitor changes in current liabilities and receivables aging to assess short-term payment capacity.
• Watch equity movements and any capital injections or withdrawals by the sole director.
• Review any changes in operational scale or staffing that might affect cost structure.
• Ensure timely submission of annual accounts and confirmation statements to maintain compliance.