ZED STUDIO LTD

Executive Summary

ZED STUDIO LTD is a very small, recently established IT consultancy with limited financial history and a weak working capital position. While currently solvent, the company’s declining equity and negative net current assets suggest tight liquidity, warranting cautious credit exposure with close monitoring. Management is stable but concentrated, increasing the importance of ongoing financial scrutiny before increasing credit limits.

ZED STUDIO LTD - Analysis Report

Company Number: 14103089

Analysis Date: 2025-07-29 18:14 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   ZED STUDIO LTD is a micro-entity operating in IT consultancy since 2022. The company shows a modest net asset base of £917 as of May 2024, reduced from £3,447 the previous year, with net current liabilities of £1,136. While it remains solvent, the declining net assets and working capital deficit indicate tight liquidity. The single director and sole shareholder, Mr. Single, maintains full control, which supports consistent management but concentrates risk. Given the company's short trading history and weak working capital, credit should be extended cautiously with conditions such as monitoring and short-term limits.

2. Financial Strength:
   The balance sheet reflects a small scale operation with fixed assets of £2,053 (down from £3,454) and current assets of £17,168 against current liabilities of £18,304. The company has negative net current assets, indicating potential short-term funding pressure. The equity has decreased substantially, suggesting either losses or withdrawals, but no explicit P&L data is provided. The company’s micro classification limits financial complexity but also constrains its capital base.

3. Cash Flow Assessment:
   Current liabilities exceed current assets marginally, signaling liquidity constraints. The absence of audit and limited disclosures restrict detailed cash flow analysis, but the working capital position points to limited buffer for unexpected expenses or downturns. The company employs one person on average, limiting wage exposure. Cash flow management and debtor collection will be critical to maintain operational stability.

4. Monitoring Points:

• Quarterly review of updated financials to track net assets and working capital movements.
• Monitoring accounts receivable aging and creditor payment terms to ensure liquidity.
• Watch for any director’s loans or related party transactions that may affect solvency.
• Keep abreast of any changes in business volume or sector risks impacting IT consultancy.
• Assess any additional capital injections or external financing arrangements.