Company Number: 13135244

Analysis Date: 2025-07-20 17:37 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Grill Power Limited shows a stable net current asset position and positive shareholders’ funds, indicating a sound equity base. However, there is a notable decline in current assets and a reduction in cash balances compared to prior years, alongside a significant drop in debtors. This could reflect operational or sales volatility. The company is relatively young (incorporated 2021) and small with only two employees, which suggests limited scale but manageable risk. Given the absence of audit and abridged accounts filing, detailed profitability and cash flow trends are unclear, warranting close monitoring of working capital and liquidity going forward. Credit approval is recommended with conditions on regular financial updates and monitoring of debtor collection and stock turnover.

2. Financial Strength:
   The balance sheet as of 31 March 2024 shows current assets of £291,200 against current liabilities of £105,052, yielding net current assets (working capital) of £186,148, an improvement from £176,907 the previous year. Shareholders’ funds stand at £186,148, showing the company is fully equity funded with no indication of long-term debt. The company holds substantial stock (£245,330), which is a key working capital component but may pose liquidity risk if slow-moving. The reduction in debtors from £86,484 in prior years to £10,592 requires investigation—this may improve cash flow but could also reflect reduced sales or changes in credit terms. Overall, the company’s financial strength is moderate, with a solid equity base but some asset composition risks.

3. Cash Flow Assessment:
   Cash at bank increased slightly to £35,278 from £29,868 the previous year, indicating modest liquidity. However, given the high level of stock and the sharp drop in trade debtors, the company’s cash conversion cycle should be reviewed. The significant stock holding may tie up cash and impact liquidity, while the low debtor balance could indicate tight credit control or reduced sales on credit terms. The company’s ability to meet short-term obligations appears adequate, supported by net current assets about 1.75 times current liabilities, but liquidity could be strained if stock is not converted quickly. The company’s small size and limited employee base suggest relatively low operating overheads, which is positive for cash flow stability.

4. Monitoring Points:

• Debtor balances and aging profile to confirm collection efficiency and sales trends.
• Stock turnover rates and valuation to avoid obsolescence risk impacting liquidity.
• Cash flow trends in subsequent periods to ensure liquidity is maintained, especially given the company’s reliance on working capital.
• Any changes in credit terms with suppliers/customers that could affect working capital.
• Regular submission of updated financial statements, ideally with a profit and loss summary, to better assess profitability and cash generation.