Credit reads — ten files read from the public record

How to read these

Each note names what the record showed, what a committee would circle, and what the record could not answer.

No read reaches a verdict: a public file supports a question set, not a conclusion. The material that answers these questions is what a Snapshot or an Audit works from.

Never filed a profit and loss account — now carrying a payroll

Industrial subcontracting

What Ziyon sawFive years of continuous filing with no turnover figure on the record. Fourteen employees against none in each of the five preceding years, and creditors due within one year up 7.78 times.

The credit questionWhat is funding a new payroll, when both debentures granted since incorporation are satisfied?

What the public file showedFive years of continuous filing, and no turnover figure on the record in any of them. In the most recent year: fourteen employees against none in each of the five preceding periods, and creditors due within one year up 7.78 times.

What a committee would circleThe first period with a trading story to tell is the one in which the record says least about it — lawfully, as a micro-entity, a six-line balance sheet. Both debentures granted since incorporation are satisfied, so that payroll is funded with no registered facility.

What could not be seen from outsideTurnover, margin, and what those creditors comprise. Net assets fell 86.5 per cent, and with no profit and loss account that movement cannot be split between trading result and distribution.

All-assets security granted, no borrowing on the balance sheet

Business-to-business technology services

What Ziyon sawTurnover flat near £3.9m and profitable. An all-assets debenture with a negative pledge granted in March; no bank loans or overdraft on the balance sheet five months later.

The credit questionIs that undrawn capacity held in reserve, or a facility the cycle has already needed once?

What the public file showedTurnover held near £3.9m, flat and profitable in both years. In March the principal trading subsidiary granted an all-assets debenture with a negative pledge; the balance sheet drawn up five months later shows no bank loans or overdraft line.

What a committee would circleSecurity completed, and no drawn balance five months later — undrawn headroom, seasonal usage, and repayment before the year end all read identically from outside. The negative pledge now conditions any further security.

What could not be seen from outsideWhat facility the debenture supports, its limit and terms. Debtor days lengthened from 45 to 58 on flat turnover; the ageing and concentration behind that are not filed.

What the answer would changeOne blank line covers two different files: capacity agreed and held in reserve, or a cycle that has already needed the line once. Same balance sheet, a different memo — and the answer is one sentence from the company that no external reader can supply.

Trading recovered; working capital went the other way

Manufacturing

What Ziyon sawTurnover down 9.0 per cent to roughly £11.7m, yet an operating loss of roughly £320,000 became a profit of roughly £440,000. The quick ratio fell from 0.88 to 0.54 and stock days moved from 70.7 to 107.1.

The credit questionIf a related-party receivable funded this recovery, what funds the next one?

What the public file showedTurnover fell 9.0 per cent to roughly £11.7m, yet an operating loss of roughly £320,000 became an operating profit of roughly £440,000 — audited, unqualified. Meanwhile the quick ratio fell from 0.88 to 0.54 and stock days moved from 70.7 to 107.1.

What a committee would circleThe recovery was delivered rather than forecast, and what funded it was a related-party receivable falling roughly £2.13m. Set that aside and the remaining working capital absorbed roughly £1.49m.

What could not be seen from outsideOther creditors of roughly £3.1m carry no analysing note, and interest of roughly £164,000 sits against average bank loans of roughly £260,000. A parent company and first-time management charges appear together, unexplained.

Growth absorbing cash, with nothing to test it against

Trade distribution

What Ziyon sawNet assets rose 253 per cent, stock 703 per cent and trade debtors 151 per cent, while cash fell 59 per cent.

The credit questionIs growth being funded efficiently, or is cash becoming trapped in working capital?

What the public file showedNet assets rose 253 per cent to roughly £1.04m, carried by retained earnings rather than injected capital, with stock up 703 per cent, trade debtors up 151 per cent, and cash down 59 per cent. The accounts are filleted: no profit and loss account is filed.

What a committee would circleStock and debtors together absorbed roughly £1.7m — profitable growth consuming working capital. Whether that is efficient or strained cannot be established: without turnover, stock days and debtor days are not computable from outside.

What could not be seen from outsideTurnover, and with it every activity ratio. A holding structure was placed above the company during the year and both shareholders moved to indirect interests; the purpose is not disclosed.

One file, two companies

Building products distribution

What Ziyon sawOn turnover of roughly £22.8m, the bank facility reduced roughly £950,000 while creditor days moved from 39.5 to 71.7. Roughly £3.36m sits lent to connected companies on no agreed terms.

The credit questionWas supplier credit substituted for bank funding by plan, or by necessity?

What the public file showedOn turnover of roughly £22.8m, the bank facility — a factoring account secured on all the assets — reduced roughly £950,000 while creditor days moved from 39.5 to 71.7. Debtors carry roughly £3.36m lent to connected companies: non-interest-bearing, no agreed terms, 54.1 per cent of net assets.

What a committee would circleBank funding and supplier funding moved in opposite directions by comparable amounts inside one year, and the facility falls due within one year or on demand. Six charges sit across two registers, in favour of one banking group.

What could not be seen from outsideWhether the substitution was planned, and when the facility next falls for review. The term and expected recovery of the connected balances, against which roughly £630,000 has been provided over two years.

A recapitalisation, and a maturity now dated

Consumer products

What Ziyon sawProfit after tax near £1.7m for a second year, stock up 173 per cent to roughly £6.2m. Then a dividend of roughly £2.5m, £2.5m of three-year secured borrowing, and security at parent level.

The credit questionCan inventory convert to cash fast enough to meet a maturity that is now a dated event?

What the public file showedProfit after tax near £1.7m for a second consecutive year, stock up 173 per cent to roughly £6.2m. Then a staged change of capital structure: a dividend of roughly £2.5m exceeding the year’s profit, £2.5m of three-year secured borrowing, and security at parent level fifteen months later.

What a committee would circleAn ungeared balance sheet became a leveraged group structure by deliberate decision, and the maturity is now a dated event on the file. The quick ratio moved from 1.05 to 0.30: the whole cash-conversion question sits in inventory.

What could not be seen from outsideWith no profit and loss account filed, stock turn — the single number on which this balance sheet turns — cannot be computed, nor leverage or covenant headroom after the recapitalisation.

Built from filed accounts and registers alone, without management information or contact with the company. Four further notes are held back pending anonymisation and will be published here.

Files read from the public record alone — and the one question each raises.