Company Number: 15027741

Analysis Date: 2025-07-20 13:00 UTC

1. Credit Opinion: DECLINE
   WOK & FRY LTD, incorporated in July 2023, is a micro-entity operating in the take-away food sector. The financials for the first reporting period ending July 2024 show a net liability position of £10,612, with current liabilities (£17,124) significantly exceeding current assets (£477). Negative net current assets indicate working capital deficiency, heightening liquidity risk. The company’s ability to service debt or meet short-term obligations is questionable given limited cash resources and a negative net asset base. Additionally, being a start-up with only 2 employees and no audit or detailed cash flow data restricts visibility on operational performance and profitability.

2. Financial Strength:
   The balance sheet reveals a weak financial position. Fixed assets are minimal (£6,034), and current assets are negligible (£477) compared to current liabilities. The net asset deficit (£-10,612) reflects accumulated losses or undercapitalization. Shareholders’ funds are negative, indicating no equity cushion. This position suggests the company is reliant on external financing or owner support to meet obligations. There is no indication of long-term debt, but the short-term creditors pose immediate repayment pressure.

3. Cash Flow Assessment:
   No direct cash flow statement is provided, but working capital is severely negative. Current liabilities outstrip current assets by over £16k, which implies potential cash flow constraints. Insufficient liquid assets to cover payables raises concerns about meeting day-to-day expenses and supplier payments. The small scale and early stage of the business exacerbate cash flow vulnerability. Continuous monitoring of cash inflows, especially sales receipts and owner funding, is critical.

4. Monitoring Points:

• Improvement in net current assets and liquidity ratios.
• Generation of positive operating cash flow to reduce reliance on external funding.
• Evidence of profitability or at least break-even trading in subsequent periods.
• Management actions to strengthen capital structure or reduce liabilities.
• Any overdue payments or defaults on creditor obligations.

Overall, WOK & FRY LTD is a newly established small food takeaway business with an early loss position and negative working capital. The current financials do not support extending credit facilities without significant mitigating factors such as owner guarantees or evidence of imminent cash injection. The business model and market position should be further scrutinized for viability before reconsidering credit.