CARBON SENSE LTD

Executive Summary

Carbon Sense Ltd has demonstrated a strong financial recovery with substantial improvements in net assets and liquidity over the latest year. The business remains small and emerging but shows signs of sound financial management and operational cash generation. Conditional credit approval is recommended with ongoing monitoring of profitability, cash flow, and working capital to ensure continued financial stability.

CARBON SENSE LTD - Analysis Report

Company Number: 14142132

Analysis Date: 2025-07-29 12:49 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Carbon Sense Ltd shows a marked financial turnaround from losses in 2023 and 2024 to a positive net asset position in 2025. The company is active, with timely filings and no overdue returns, which reflects responsible management. However, the business is still relatively new (incorporated in 2022) and small, with modest fixed assets and limited share capital. Given the improving but still modest financial scale, credit approval should be conditional on continued positive cash flow and monitoring of working capital and profitability trends.

2. Financial Strength:
   The company’s balance sheet improved significantly during the year ending May 2025. Net assets rose from a negative £1,809 in 2024 to a positive £16,879 in 2025, driven mainly by an increase in net current assets (£16,511). Fixed assets are minimal (£368), indicating low capital intensity. Shareholders’ funds reflect accumulated profits of £16,759, showing retained earnings growth. The company is classified within the small company regime, with modest share capital (£120). Overall, the company’s equity base and net asset position have strengthened, reducing financial risk.

3. Cash Flow Assessment:
   Cash at bank rose substantially to £29,620 at the 2025 year-end, up from £6,226 the prior year, indicating improved liquidity. Current liabilities increased to £15,449 but remain comfortably covered by current assets of £31,960, resulting in a strong positive working capital position. Debtor balances are low (£2,340), suggesting efficient receivables management. The company’s cash and working capital levels appear sufficient to support short-term obligations and operational needs, reducing liquidity risk.

4. Monitoring Points:

• Continued profitability and retention of earnings to sustain positive net assets.
• Maintenance of strong cash balances and working capital to cover current liabilities.
• Close attention to debtor aging and creditor payment terms to avoid cash flow pressure.
• Management of modest fixed asset base to ensure asset utilization aligns with growth.
• Monitoring any impact of the company’s environmental consulting sector dynamics on revenue stability.