WEJUSTRAFFLE LIMITED

Executive Summary

Wejustraffle Limited demonstrates weak financial health with persistent negative net assets and heavy reliance on director loans, resulting in liquidity and capital structure concerns. Despite increased cash balances in 2023, these are primarily internally sourced rather than operational, raising credit risk. Given these weaknesses, credit approval is declined without significant financial restructuring or guarantees.

WEJUSTRAFFLE LIMITED - Analysis Report

Company Number: SC682656

Analysis Date: 2025-07-29 20:33 UTC

1. Credit Opinion: DECLINE
   Wejustraffle Limited exhibits significant net liabilities and persistent negative shareholders’ funds over recent years, indicating an ongoing capital deficit and weak financial footing. The company’s current liabilities surpass its current assets by £7,453 as of 31 December 2023, reflecting poor short-term liquidity and working capital deficiency. Despite a sharp increase in cash balances during 2023, this appears primarily funded by a director’s loan account (£63,560), which heightens related party risk and dependence on insider funding rather than operational cash flow generation. The absence of profitability evidence and reliance on director loans undermines confidence in the company’s ability to service new or existing external credit facilities. Given these factors, extending credit without substantial mitigation (e.g., personal guarantees or improved financial support) is not advisable.

2. Financial Strength:
   The balance sheet reveals a fragile financial position with net assets at -£6,205 in 2023, a slight improvement compared to -£7,385 in 2022 but still materially negative. Fixed assets are minimal (£1,248) and largely consist of depreciating computer equipment. The company’s capital structure is heavily reliant on director loans (£63,560 current liability), indicating inadequate equity or external funding. No retained earnings or reserves exist as the profit and loss account shows cumulative losses. The company’s issued share capital is nominal (£2), demonstrating limited shareholder financial backing. Overall, the balance sheet lacks robustness to support credit risk.

3. Cash Flow Assessment:
   While cash at bank has increased significantly from £5,558 in 2022 to £57,183 in 2023, this rise coincides with a substantial increase in current liabilities, especially the director’s loan account. This suggests cash inflows are not from trading but from internal financing. Net current liabilities remain negative, indicating working capital deficits. No evidence of positive operating cash flows or profitability is provided, and the company’s ability to generate sustainable cash to meet obligations is questionable. Liquidity risk is elevated without a clear path to improved operational cash flow.

4. Monitoring Points:

• Track changes in director loan balances and related party transactions to assess ongoing reliance on insider funding.
• Monitor cash flow from operations and any moves toward profitability or reduction in accumulated losses.
• Watch for improvements in net current assets and reduction of current liabilities, especially short-term debt.
• Review any upcoming filings for changes in capital structure or additional equity injections.
• Assess management's ability to diversify funding sources to reduce concentration risk.