YELLOW UMBRELLA LETTINGS LIMITED

Executive Summary

Yellow Umbrella Lettings Limited is a newly incorporated micro-entity showing negative net assets and working capital deficiencies in its first annual accounts. The company has a weak liquidity position and relies heavily on creditor funding, indicating limited capacity to service debt or credit. Credit facilities are not recommended at this stage without material improvements in financial strength and cash flow generation.

YELLOW UMBRELLA LETTINGS LIMITED - Analysis Report

Company Number: 14837659

Analysis Date: 2025-07-29 20:15 UTC

1. Credit Opinion: DECLINE
   Yellow Umbrella Lettings Limited is an early-stage micro-entity incorporated less than two years ago. The latest accounts as of 31 May 2024 reveal a net liability position of £1,102 and negative net current assets of £24,927, indicating a working capital deficit and strained liquidity. The company’s current liabilities exceed current assets significantly, and there is a sizable long-term creditor balance (£49,688) almost equal to total assets less current liabilities (£49,306), suggesting reliance on external financing. Given the negative equity and cash flow constraints, the company currently lacks the financial strength and operational track record to reliably service debt or credit facilities. Without evidence of profitable trading, cash generation, or capital injection, extending credit would be high risk.

2. Financial Strength:
   The balance sheet shows fixed assets of £74,233, which appear to be the main tangible asset base, likely related to property or leasehold interests in the lettings business. However, current assets are minimal (£2,291), while current liabilities stand at £27,218, creating a negative working capital position of nearly £25k. Additionally, creditors due after one year total £49,688, pushing net liabilities to £1,102. The negative shareholders’ funds reflect accumulated losses or initial funding shortfalls. The absence of any retained earnings or profit reserves confirms the company is still in a start-up phase without accumulated financial strength.

3. Cash Flow Assessment:
   The micro-entity accounts do not provide detailed cash flow statements, but the negative net current assets indicate limited liquidity and a potential cash crunch. The company has no reported employees and minimal current assets, suggesting limited operational cash inflows. The reliance on creditor funding (both short and long term) suggests external financing is critical for ongoing operations. Without positive working capital or cash reserves, the company’s ability to settle short-term obligations on time is questionable, increasing credit risk.

4. Monitoring Points:

• Monitor subsequent trading results and cash flow improvements in the next 12 months to assess operational viability.
• Watch for any capital injections or equity financing that improve net asset position and working capital.
• Track creditor aging and payment behavior to identify any emerging liquidity distress.
• Review updated accounts at next filing date to evaluate if negative equity persists or is resolved.
• Assess management plans for profitability and cash flow sustainability as the company matures.