ZENDICO LIMITED
Executive Summary
Zendico Limited is a start-up business with no trading history and a weak financial position characterized by negative net assets and reliance on director loans. The company currently lacks the financial strength and cash flow to support credit facilities. Close monitoring of its operational progress and financial improvements is essential before reconsidering credit approval.
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This analysis is opinion only and should not be interpreted as financial advice.
ZENDICO LIMITED - Analysis Report
Credit Opinion:
DECLINE. Zendico Limited is a newly incorporated SME with only one financial period filed. The accounts show net current liabilities of £5,507 and net negative shareholders’ funds of the same amount, indicating the company is currently insolvent on a balance sheet basis. The company is funded entirely by director loans (£6,456) with no operational cash inflows evident. No turnover or profitability data is presented, and there are no employees. This suggests the business has yet to establish trading activity or generate revenue. Given the weak financial position and lack of trading history, the risk of default on credit facilities is high.Financial Strength:
The balance sheet is fragile with current assets of only £949, consisting mainly of VAT debtors (£705) and cash (£244). Current liabilities are £6,456, all of which are director loans, creating a negative working capital position of £5,507. The company has no fixed assets or equity capital beyond the nominal share capital of £100. Shareholders’ funds are negative, reflecting accumulated losses or the initial funding structure. The company is effectively reliant on director funding with no external equity or third-party debt.Cash Flow Assessment:
Cash reserves are very limited at £244, insufficient to cover current liabilities. The company’s working capital deficit and reliance on director loans suggest liquidity risk. There is no indication of operational cash inflows or turnover, which raises concerns about the company’s ability to service existing liabilities or future credit lines. The absence of employees and trading revenue further compounds concerns about cash generation capacity.Monitoring Points:
- Trading performance and revenue generation in the next 12 months.
- Changes in working capital position, especially reductions in director loans or increases in current assets.
- Timely filing of next accounts and confirmation statements.
- Any increase in external financing or equity injections to improve liquidity and solvency.
- Management actions to establish sustainable operations and profitability.
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