Company Number: 12992092

Analysis Date: 2025-07-20 14:37 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   CAG Electrical Ltd is a small, active electrical installation business established in 2020, currently filing as a micro-entity. Although the company has demonstrated a modest increase in net assets (£2,150 in 2023 from £81 in 2022), its working capital position remains negative, indicating short-term liquidity constraints. The directors have maintained compliance with filing deadlines and appear to manage the company responsibly. However, the negative net current assets and the presence of long-term creditors require monitoring. Credit approval is recommended on a conditional basis, subject to regular review of liquidity and debt servicing capability.

2. Financial Strength:
   The balance sheet shows fixed assets of £10,260 and net assets of £2,150 as of November 2023, up from £81 the prior year. Total liabilities due within one year stand at £7,282 against current assets of only £2,046, resulting in a net current liability of £5,236. Long-term liabilities have decreased to £2,874 from £5,787, improving the overall gearing slightly. The modest equity base and negative working capital reflect limited financial strength typical of a micro enterprise, with a need to strengthen liquidity or reduce short-term debt.

3. Cash Flow Assessment:
   Negative net current assets indicate potential cash flow pressure, with current liabilities exceeding current assets by over £5,000. The company’s ability to meet short-term obligations may be constrained without additional working capital injection or improved receivables management. With only 4 employees, operating expenses may be relatively contained, but careful cash flow forecasting is advised. The absence of off-balance-sheet liabilities is positive.

4. Monitoring Points:

• Monthly or quarterly review of cash flow and working capital ratios to detect liquidity stress early.
• Trends in current liabilities and creditor days to assess payment delays or accumulating short-term debts.
• Profitability trends and retained earnings growth to ensure the business can generate internal cash for debt servicing.
• Any changes in director appointments or ownership structure that might impact management stability or control.
• Compliance with filing deadlines to avoid regulatory penalties or reputational risk.