Company Number: 12931717

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

1. Credit Opinion: CONDITIONAL APPROVAL
   Yorkshire Spirits Ltd is an active micro private limited company operating in wholesale of alcoholic beverages. The company shows a modest asset base and net asset position but recent financials indicate a slight deterioration in working capital, turning negative in the latest year. The director holds full control, which centralizes decision-making but also concentrates risk. Given these factors, credit can be extended on condition of close monitoring of liquidity and repayment capacity, with limits aligned to current asset levels and frequent review of trading performance.

2. Financial Strength:
   The balance sheet presents fixed assets of approximately £10.9k and current assets of £39.8k against current liabilities of £41.1k as of 31 March 2024. This results in a net current liability position of £1.3k, a decline from a marginal positive net current asset position in prior years. Shareholders’ funds have reduced from £12.8k in 2023 to £9.6k in 2024, indicating some erosion of equity possibly due to operational losses or asset write-downs. The company’s capital base remains low, reflective of its micro entity classification, and the financial position is fragile with minimal buffer to absorb shocks.

3. Cash Flow Assessment:
   Working capital is currently negative, which raises concerns about short-term liquidity and the ability to meet immediate obligations without additional financing or improved cash inflows. The company’s average employee number is only one, indicating limited overhead but also limited operational scale. There is no audit conducted, so financial statements are unaudited which adds some risk to the reliability of reported figures. Overall, cash flow appears constrained; credit limits should be conservative and facilities structured to avoid liquidity strain.

4. Monitoring Points:

• Track quarterly cash flow and working capital trends to ensure deterioration does not worsen.
• Monitor debtor collection periods and inventory turnover given wholesale nature to avoid cash conversion cycle extension.
• Review any changes in director control or ownership that might affect governance or risk profile.
• Watch for any overdue filings or changes in company status that might signal distress.
• Assess impact of market conditions on alcoholic beverage wholesale sector, especially regulatory or supply chain risks.