Company Number: 14249666

Analysis Date: 2025-07-29 20:50 UTC

1. Credit Opinion: DECLINE
   Acheron Electrical Limited demonstrates significant liquidity stress with current liabilities more than tripling year-on-year to £18,379 against cash holdings of just £4,993. The resulting negative working capital of £13,386 undermines its ability to meet short-term obligations. The sharp deterioration from net current assets of £4,034 in 2023 to a sizeable deficit in 2024 indicates worsening cash flow management or rising payables. Given the company is young (incorporated 2022) and has limited financial history, the absence of profitability data and the negative net current assets raise concerns about operational viability and debt servicing capacity. Without demonstrated cash flow improvement or additional capital injection, extending credit would carry elevated risk.

2. Financial Strength:
   The company’s balance sheet is weak with net assets declining from £4,034 to £1,798 in the last year. Fixed assets increased to £15,184 due to recent capital expenditure but have been depreciated to £15,184 net book value, indicating asset investment but no immediate liquidity benefit. The key concern is the deteriorating working capital position; current liabilities (£18,379) substantially exceed current assets (£4,993), reflecting potential overdue payables or accruals. Shareholders’ funds are minimal (£1,798), indicating limited equity buffer to absorb losses or fund growth. Overall, the financial strength is fragile.

3. Cash Flow Assessment:
   Cash on hand has decreased sharply from £12,974 to £4,993, signaling cash burn or increased operational outflows. The negative net current assets imply that short-term liabilities are not adequately covered by liquid assets, presenting a liquidity risk. The company’s single-employee structure and small scale suggest limited internal resources to manage cash flow challenges. Without detailed profit and loss or cash flow statements, the reliance on cash balance decline and rising liabilities points to strained liquidity and potential difficulties in meeting creditor demands timely.

4. Monitoring Points:

• Track quarterly cash balances and current liability trends to detect further liquidity deterioration.
• Monitor creditor aging reports for overdue payables or supplier disputes.
• Review upcoming filings for profit & loss and cash flow statements to assess operational profitability and cash generation.
• Watch for any director or shareholder capital injections that may stabilize finances.
• Evaluate any changes in business activity or contracts that could improve revenue and cash inflow.