Company Number: 15555722

Analysis Date: 2025-07-29 12:51 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Automatic Door Installations Limited is a newly incorporated small private company operating in the construction installation sector. While it is currently active and compliant with filing deadlines, the financials for its first accounting period show net current liabilities and a modest net asset base. The company has limited trading history and negative working capital, which suggests some liquidity pressure. However, cash holdings are reasonable relative to current liabilities, and the directors have engineering experience relevant to the business. Approval is recommended with conditions, such as monitoring liquidity closely and potentially requiring personal guarantees or collateral to mitigate risk until the company demonstrates stable cash flow and profitability.

2. Financial Strength:

• Fixed assets stand at £30,989, mainly plant and machinery, indicating investment in operational capacity.
• Current assets total £67,784 (cash £48,832 and debtors £18,952), but these are outweighed by current liabilities of £74,397, resulting in net current liabilities of £6,613.
• Net assets and shareholders’ funds are positive at £17,046, but this is modest and partly reflects minimal share capital (£100) and accumulated retained earnings.
• Provisions for liabilities are £7,330, which further reduces available net assets.
• The balance sheet shows limited financial cushioning, and the negative working capital position poses a concern for short-term solvency.

3. Cash Flow Assessment:

• Cash balance of £48,832 provides some short-term liquidity, which is positive for meeting immediate obligations.
• Debtors of £18,952 may contain some collection risk but are relatively low, consistent with a start-up stage.
• The company’s current liabilities (£74,397) include significant "other creditors" (£53,375) and tax liabilities (£14,500), which will require careful management to avoid payment delays or enforcement action.
• Negative net current assets indicate that working capital management is currently strained; the company must improve cash flow generation or extend payables to maintain operational continuity.

4. Monitoring Points:

• Track liquidity ratios monthly, particularly current ratio and quick ratio, to ensure the company can meet short-term debts.
• Monitor debtor collections closely and aging to mitigate overdue receivables risk.
• Watch creditor payment terms and tax liabilities to avoid penalties or enforcement from HMRC.
• Assess turnover and profitability trends in subsequent accounting periods to confirm business viability and growth trajectory.
• Review directors’ actions and any changes in shareholding or control that might affect governance or financial stability.