BARNES (N/E) ELECTRICAL LTD

Executive Summary

BARNES (N/E) ELECTRICAL LTD shows a high risk profile primarily due to a significant erosion of net assets and a substantial long-term creditor position relative to total assets. While regulatory compliance is maintained and fixed assets provide some stability, the company's financial leverage and minimal equity cushion raise concerns about its ability to meet obligations and sustain operations. Further investigation into its liabilities and cash flow is recommended to fully ascertain financial health.

BARNES (N/E) ELECTRICAL LTD - Analysis Report

Company Number: 13166653

Analysis Date: 2025-07-20 17:18 UTC

1. Risk Rating: HIGH
   The company exhibits a concerning solvency profile due to a very low net asset base (£514 in 2025) and significant long-term liabilities that nearly offset total assets. The reduction in shareholders' funds from £9,322 in 2024 to £514 in 2025 signals financial deterioration. Given the micro-entity status and minimal equity buffer, the company faces elevated risk in meeting longer-term obligations.

2. Key Concerns:

• Solvency and Capital Erosion: Net assets have declined sharply, dropping over 90% in one year, indicating potential insolvency risk.
• Long-Term Debt Burden: Creditors due after one year (£40,345) are almost equal to total assets, suggesting heavy leverage and limited asset coverage.
• Limited Operating Scale and Staffing: With only one employee (the director) and fixed assets unchanged, operational scalability and resilience appear constrained.

3. Positive Indicators:

• No Filing Delinquencies: Annual accounts and confirmation statements are up to date, reflecting regulatory compliance.
• Consistent Fixed Asset Base: Fixed assets have remained stable, providing some tangible asset backing.
• Full Ownership and Control: The sole director and 100% shareholder alignment may facilitate swift decision-making.

4. Due Diligence Notes:

• Investigate the nature and terms of the long-term liabilities to assess repayment schedules and covenants.
• Review profit and loss trends and cash flow statements (not provided) to understand operational performance and liquidity dynamics.
• Confirm if the company has access to external funding or guarantees from the director given the low equity position.
• Assess the business model viability given limited staffing and asset base in the context of the electrical equipment repair industry.