ABC MAINTENANCE LTD

Executive Summary

ABC Maintenance Ltd is a micro-sized company with stable but limited financial resources and modest working capital. While it currently maintains positive net assets and no debt, its low equity and tight cash position warrant cautious credit exposure. Approval is recommended subject to limits on facility size and ongoing monitoring of cash flow and receivables.

ABC MAINTENANCE LTD - Analysis Report

Company Number: 12947836

Analysis Date: 2025-07-20 14:29 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   ABC Maintenance Ltd is a small, privately held company with limited operating history (incorporated 2020). Its financials show modest net current assets (£5,000 as of 31/10/2023) and shareholders’ funds (£5,000), indicating a very small equity base. The company has consistently maintained positive net current assets, but the absolute amounts are low. The presence of £40,000 in other investments is notable and provides some cushion. However, cash balances have decreased slightly year-over-year (£4,629 vs £5,663) and trade debtors have increased, which could indicate slower collections. The company operates in cleaning and real estate management sectors, which are service-oriented and may have steady demand but can be sensitive to economic cycles. Given these factors, the company can likely service modest credit facilities, but the limited scale and low equity require careful monitoring of cash flow and receivables. Approval is recommended with conditions on facility size and regular financial review.

2. Financial Strength:
   The balance sheet reflects a small but stable working capital position. Current assets (£47,705) exceed current liabilities (£42,705), yielding net current assets of £5,000, consistent with last year’s £5,809. Shareholders’ funds stand at £5,000, down slightly from £5,809, suggesting minimal retained earnings or possible small losses. No fixed assets are reported, and the company holds significant non-current investments (£40,000), which strengthens the asset base but raises questions about liquidity. The company carries no long-term debt, indicating an unleveraged position but also limited capital resources. Overall, the financial strength is modest and typical for a micro/small entity, with limited buffer against downturns.

3. Cash Flow Assessment:
   Cash on hand decreased by approximately £1,000 in the latest year, from £5,663 to £4,629. Trade debtors increased from £400 to £2,886, suggesting slower cash conversion or increased credit sales, which could pressure liquidity if not managed carefully. Current liabilities rose modestly, and accruals/deferred income remain low. The net current asset position is positive but tight, indicating limited working capital flexibility. The company’s single-employee base reduces fixed costs, but the small cash buffer necessitates close attention to cash flow timing and debtor collections. No audit was performed, so cash flow quality relies on internal controls.

4. Monitoring Points:

• Monitor receivables aging and collection efficiency to avoid cash flow strain.
• Track cash balances monthly to ensure liquidity remains positive.
• Review any changes in investments to assess liquidity impact.
• Watch for any increase in current liabilities or accruals that could tighten working capital.
• Assess profitability trends when profit and loss accounts become available to evaluate earnings capacity.
• Monitor industry conditions for cleaning and real estate management sectors for potential demand shocks.