Company Number: 13267132

Analysis Date: 2025-07-20 16:25 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   A K SOOMAL LTD presents a mixed credit profile. The company remains active and has filed accounts on time, which is positive. However, the recent financial year (to 31 March 2024) shows a sharp deterioration in working capital, with net current liabilities of £1,096 compared to net current assets in prior years. Net assets have also declined to £1,103 from £1,673 the previous year. This reduction signals liquidity stress and a weakening ability to meet short-term obligations. The business is small (micro-entity) and owner-managed with a single director controlling all shares, which limits operational scale and diversification. Given these factors, credit should be extended with caution, ideally with conditions such as limits on exposure or requirements for updated financial monitoring to ensure liquidity improves.

2. Financial Strength:
   The company’s balance sheet shows very limited fixed assets (£2,199) and modest current assets (£882) as of 2024. The most concerning aspect is the increase in current liabilities to £1,978, causing a negative working capital position. Although net assets remain positive, the decline from £3,129 in 2021 to £1,103 in 2024 reflects a downward trend in retained earnings and capital. The company operates within the micro category, consistent with its small capital base (£1 share capital). The concentrated ownership under one director limits access to additional equity funding, which could constrain financial flexibility.

3. Cash Flow Assessment:
   The negative net current assets indicate potential liquidity issues, suggesting the company may struggle to cover short-term debts from current assets. The absence of employees apart from the director implies low operational overheads, but also limited capacity for revenue generation growth. The accounts do not show cash or detailed profit & loss data here, but working capital deterioration warrants close attention. The director’s occupation as a therapist aligns with the SIC code for human health activities, which may be sensitive to economic cycles and consumer spending. Without strong cash reserves or external financing, the company’s ability to weather downturns is constrained.

4. Monitoring Points:

• Quarterly or biannual financial updates to track working capital and liquidity trends.
• Debtor and creditor aging schedules to assess collection efficiency and payment terms.
• Any changes in ownership or director appointments that may affect governance or financial controls.
• Cash flow forecasts and actuals to detect early signs of strain.
• Evidence of business growth or diversification that could improve financial stability.
• Monitor timely filing of future accounts and confirmation statements to ensure operational compliance.