ZALA INTERNATIONAL LTD

Executive Summary

ZALA INTERNATIONAL LTD currently exhibits weak financial health characterized by negative net assets, limited capital, and ongoing creditor obligations. Despite some liquidity improvement in cash balances, the absence of profitability and minimal operational scale present significant credit risks. Credit facilities are not recommended until the company demonstrates consistent positive cash flows, improved equity position, and operational stability.

ZALA INTERNATIONAL LTD - Analysis Report

Company Number: 13050542

Analysis Date: 2025-07-29 21:04 UTC

1. Credit Opinion: DECLINE
   ZALA INTERNATIONAL LTD demonstrates consistent negative net asset positions and losses retained in profit and loss reserves over recent years, with net assets deteriorating from -£8,609 in 2023 to -£1,731 in 2024, indicating ongoing financial stress. The company’s current liabilities exceed current assets in prior years but improved slightly in 2024; however, net current assets seem overstated due to creditor classification inconsistencies (e.g., current liabilities and creditors after one year figures). Lack of employees and limited capital base (£100 share capital) raise concerns about operational scale and financial resilience. Absence of turnover or profitability data and no substantive asset base limit ability to service debt. Overall, the company's financial profile suggests an elevated credit risk and inability to reliably service new credit facilities.

2. Financial Strength:
   The balance sheet shows very limited fixed assets (not disclosed, presumably minimal), a small current asset base mainly composed of cash (£4,678 in 2024), and ongoing creditor obligations, with long-term liabilities reducing from £9,025 to £6,025 year-on-year but still significant relative to the asset base. Shareholders’ funds remain negative (-£1,731), reflecting accumulated losses. The company’s capital structure is weak with only £100 in share capital and persistent losses retained. The lack of tangible fixed assets and minimal working capital cushion indicates low financial strength and vulnerability to operational downturns or liquidity shocks.

3. Cash Flow Assessment:
   Cash at bank increased notably from £710 in 2023 to £4,678 in 2024, which is a positive indicator of liquidity improvement. However, the absence of detailed cash flow statements or turnover data limits the assessment of operating cash generation. Current liabilities decreased but the presence of significant creditors due after more than one year (£6,025) suggests existing debt obligations that may strain future cash flows. The company’s working capital position improved in 2024 but remains fragile. With zero reported employees and minimal operational scale, cash inflows may be inconsistent, raising concerns about sustainable liquidity.

4. Monitoring Points:

• Monitor future trading performance and turnover to assess revenue generation and profitability trends.
• Watch changes in net assets and profit and loss reserves to detect any improvement or further deterioration in retained earnings.
• Track creditor aging and classification between short and long-term liabilities for clarity on debt servicing burden.
• Review cash flow statements when available to evaluate operational cash generation versus financing needs.
• Observe any capital injections, changes in share capital, or new financing arrangements that can strengthen the balance sheet.
• Keep an eye on director and shareholder disclosures for changes in control or management that may impact governance and risk.