Write a letter replying to the query about a firm's financial status.

Dear Sir,

This is with reference to your letter No. Trades_____, dated ________. It is with regret that we inform you that the firm in question has not been doing well for the last three years.

According to the information available to us the financial position of the firm is in a fluid state and hence in strict confidence, we advice you to desist from having business on credit with them.

 Thanking you

Yours faithfully