Company Number: 12506858

Analysis Date: 2025-07-29 16:44 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Which Cloud Ltd is a micro-entity IT consultancy with a stable but declining net asset base over the last year. The company shows positive net current assets and no overdue filings, indicating reasonable financial discipline. However, the drop in net assets from £72,433 to £50,748 signals some financial weakening. The unsecured director loan of £43,683 (repaid post-year end) reflects temporary liquidity support but also reliance on insider funding. Given these factors, credit approval can be granted conditionally, preferably with limits on exposure and monitoring of liquidity and profitability trends.

2. Financial Strength:
   The balance sheet as of 31 March 2024 shows total fixed assets of £30,916 and current assets of £52,106 against current liabilities of £28,376, resulting in net current assets of £24,560. After accounting for non-current liabilities (£3,667) and accruals (£1,061), net assets stand at £50,748, down from £72,433 the previous year. The decline mainly stems from reduced current assets and increased liabilities. Shareholders’ funds equal net assets, indicating no external equity dilution. The company maintains a positive equity position but with diminished buffer compared to prior years.

3. Cash Flow Assessment:
   Current assets include cash, debtors, and prepayments but are significantly lower than the previous year, which may strain short-term liquidity. The current liabilities remain moderate but increased relative to net current assets, reducing working capital. The director loan of £43,683 advanced during the year (repaid after year-end) suggests temporary liquidity constraints. The repayment post year-end restores some confidence in cash flow management. Overall, working capital is positive but weaker, warranting close monitoring of cash inflows and collections.

4. Monitoring Points:

• Track net current assets and liquidity ratios quarterly to detect any further erosion of working capital.
• Monitor repayment status and any new director or related-party loans closely.
• Assess profitability trends and cash generation to ensure continued ability to service debt and operational expenses.
• Review any changes in current liabilities, especially short-term borrowings or trade payables.
• Confirm timely submission of future accounts and confirmation statements to avoid compliance risks.