WENLOCK EDGE FARM LIMITED

Executive Summary

Wenlock Edge Farm Limited shows a positive financial trajectory with improved net assets and working capital in its second year of trading. The company’s micro scale and recent incorporation necessitate cautious credit extension with ongoing monitoring of liquidity and operational cash flow. Conditional approval is recommended given current financial strength and management control.

WENLOCK EDGE FARM LIMITED - Analysis Report

Company Number: 13909796

Analysis Date: 2025-07-20 17:09 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Wenlock Edge Farm Limited demonstrates an improving financial position with increasing net assets and a positive turnaround in net current assets in the latest financial year. However, as a relatively new business incorporated in 2022, with a micro account category and limited financial history, some caution is warranted. The company’s ability to service debt appears adequate based on current assets exceeding current liabilities and a positive working capital position. The director holds full control, which suggests decision-making is centralized but also concentrated risk. Credit should be extended with monitoring conditions, particularly focusing on liquidity and profitability trends as the company scales.

2. Financial Strength:
   The balance sheet shows a healthy net asset position increasing from £29,846 in 2023 to £44,972 in 2024. Fixed assets have decreased slightly (£63k to £47k), possibly due to disposals or depreciation, while current assets have remained stable (~£102k). Current liabilities have reduced significantly from £109k to £90k, improving net current assets from a negative £7,217 to a positive £12,268. Long-term liabilities also decreased from £26k to £14k, further strengthening the equity base. Overall, shareholders’ funds have increased, reflecting retained earnings or additional capital. The company’s micro size limits complexity but the balance sheet shows improving financial resilience.

3. Cash Flow Assessment:
   Current assets primarily include cash, debtors, and stock which sufficiently cover short-term liabilities, indicating reasonable liquidity. The turnaround in net current assets is a positive sign for working capital management. The average number of employees has modestly increased from 7 to 8, which may impact cash requirements but also signals business growth. No audit was required, so detailed cash flow statements are unavailable; however, the balance sheet suggests the company can meet short-term obligations. Monitoring of cash flow generation from operations is advised to ensure sustained liquidity.

4. Monitoring Points:

• Track quarterly or interim financial updates to confirm continued improvement in liquidity and profitability.
• Watch for any significant changes in current liabilities or overdue payables that could strain cash flow.
• Monitor director and shareholder actions given concentrated control for potential changes in strategy or capital structure.
• Review any new credit facilities or borrowing to ensure debt serviceability remains manageable.
• Keep an eye on market conditions affecting the meat processing and retail sector, as this impacts sales and margins.