YZ CONNECTION LIMITED

Executive Summary

YZ Connection Limited is a newly established micro-entity with limited operational history and negative working capital. While the company currently lacks liquidity to cover short-term liabilities, the absence of debt and shareholder equity provide a modest financial cushion. Credit approval is recommended on a conditional basis with close monitoring of cash flow improvements and operational progress.

YZ CONNECTION LIMITED - Analysis Report

Company Number: 14910829

Analysis Date: 2025-07-20 14:47 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   YZ Connection Limited is a newly incorporated private limited company (June 2023) with its first set of accounts filed to June 2024. The company has a modest asset base primarily consisting of investments (£36,000) and limited current assets (£8,627). However, it reports net current liabilities of £10,745, indicating short-term liquidity pressure. The shareholders' funds of £25,255 reflect initial capital injection rather than trading profits. Absence of bank loans or finance leases reduces immediate financial risk. Given the company's infancy and limited operational history, credit approval should be conditional on ongoing cash flow monitoring and receipt of updated financials demonstrating improved liquidity and operational cash generation.

2. Financial Strength:
   The balance sheet shows total net assets of £25,255, which is primarily equity capital rather than earnings retention. Fixed assets are minimal and represented by unlisted investments with a small impairment charge. The negative net current assets position suggests working capital is tight, with current liabilities exceeding current assets by approximately £10.7k. There is no indication of long-term debt, which limits leverage risk, but also points to reliance on equity funding. Overall financial strength is weak at present due to limited asset base and negative working capital, typical for a micro-entity in early development.

3. Cash Flow Assessment:
   Cash on hand is low at £8,627 and insufficient to cover current liabilities of £19,372, creating a liquidity gap. With no trade debtors or stock reported, the company likely relies on equity injections or related party funding for working capital. The absence of bank loans reduces financial strain but also limits external liquidity buffers. The company must demonstrate improved cash flow management and working capital control to meet short-term obligations reliably.

4. Monitoring Points:

• Liquidity position and net current asset trend in subsequent reporting periods.
• Operating cash flow generation and progress towards positive working capital.
• Any new external borrowing or capital injections to support growth.
• Directors’ ability to manage costs and scale operations sustainably.
• Timeliness of future filings and consistency of financial disclosures.