Company Number: SC670982

Analysis Date: 2025-07-19 12:55 UTC

1. Credit Opinion: DECLINE
   BEAP Engineering Ltd shows significant deterioration in its financial position over the latest reporting period. The company moved from a positive net asset position of £10,039 in 2023 to a marginal net asset value of £156 in 2024, indicating a near depletion of equity. Furthermore, net current assets turned negative (£-2,730), with current liabilities exceeding current assets by a concerning margin. This suggests potential liquidity pressure and raises doubts about the company’s short-term ability to meet its obligations. The sharp increase in current liabilities, especially corporation tax and VAT, without a corresponding rise in current assets or cash, heightens the risk of payment difficulties. Given these signs of financial stress and limited shareholder funds, the company’s ability to service debt or new credit facilities is currently weak.

2. Financial Strength:
   The balance sheet reveals a declining trend in shareholders’ funds from £38,681 in 2020 down to £156 in 2024, indicating accumulated losses or withdrawals. Fixed assets are modest (£3,847) and do not provide significant collateral coverage. The company’s working capital position has deteriorated drastically, with current liabilities nearly three times the level from the prior year (from £19,727 to £53,964). The increase in creditors, particularly tax liabilities, is a red flag for financial management and cash flow planning. The very low net asset base implies limited buffer against operational risks or economic downturns.

3. Cash Flow Assessment:
   Cash holdings increased slightly from £22,391 to £23,196, which is positive, but this is insufficient to cover the significant jump in current liabilities. Trade debtors increased substantially from £5,591 to £28,038, suggesting either higher sales or extended credit terms, but this also raises concern over collection risk and working capital strain. Negative net current assets and the sizeable tax liabilities indicate the company may face immediate liquidity challenges. The absence of reported profitability data limits full cash flow insight, but the balance sheet points to constrained cash flow capacity.

4. Monitoring Points:

• Track monthly cash flow closely for signs of liquidity stress.
• Monitor trade debtor aging and collection performance to ensure receivables convert timely to cash.
• Observe tax and VAT liability payment schedules to avoid penalties or enforcement action.
• Watch net asset trends and equity injections if any, which may be necessary to stabilise the balance sheet.
• Review management actions to improve working capital management and operational profitability.