CREO ENGINEERING SOLUTIONS LIMITED

Executive Summary

Creo Engineering Solutions Limited has reversed previous losses and improved its financial position in 2023, showing positive net assets and working capital. However, limited financial buffers and close current asset/liability levels warrant conditional approval dependent on ongoing liquidity monitoring and management account reviews. The company’s small scale and reliance on related party funding require careful scrutiny to mitigate credit risk.

CREO ENGINEERING SOLUTIONS LIMITED - Analysis Report

Company Number: SC684485

Analysis Date: 2025-07-29 14:26 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Creo Engineering Solutions Limited has demonstrated a return to positive net assets and working capital in its most recent financial year (2023), moving from a negative equity position in prior years. While this indicates improving financial health and management’s ability to stabilize the business, the company remains small with relatively modest asset bases and current liabilities close to current assets. The company’s sector (other engineering activities) is generally capital intensive and may expose it to project risk and cash flow variability. Given the improving trend but still limited financial buffers, credit approval should be conditional on ongoing monitoring of liquidity and receivables collection, as well as provision of updated management accounts every 6 months to ensure continued financial stability.

2. Financial Strength:

• Shareholders’ funds have improved from a negative £4,169 in 2022 to positive £2,420 in 2023, reflecting a turnaround possibly through retained earnings and better cost control.
• Net current assets have shifted from a deficit of £4,166 in 2022 to a positive £2,420 in 2023, indicating improved short-term liquidity.
• The company holds £27,840 in cash, which is a strong position relative to its current liabilities of £39,955, but trade creditors and other short-term payables remain significant.
• Debtors have decreased significantly from £14,722 in 2022 to £3,685 in 2023, which may reflect better collections or reduced sales; however, the reduction should be monitored as it could impact turnover.
• Stock levels have increased from £2,962 to £10,850, indicating investment in inventory which carries some risk if not turned over efficiently.
  Overall, the balance sheet is recovering but remains fragile given the small net asset base and working capital close to zero.

3. Cash Flow Assessment:

• Cash at bank (£27,840) provides a reasonable liquidity cushion.
• Current liabilities (£39,955) are high relative to cash and debtors combined (£31,525), placing pressure on working capital management.
• The presence of directors’ loans (£3,843) within creditors suggests some reliance on related party funding, which can be supportive but also signals external financing needs.
• The company employs only one person, which limits fixed overheads, but also restricts capacity for scaling.
• The improved net current assets and cash position from prior years are positive signs, but the company’s ability to generate consistent positive operating cash flow should be closely reviewed through interim financials.

4. Monitoring Points:

• Continued improvement or stability in net current assets and net assets.
• Receivables ageing and debtor collection efficiency to avoid cash flow bottlenecks.
• Inventory turnover rates to ensure stock investment does not tie up excessive funds.
• Directors’ loans and related party transactions to be reviewed for sustainability.
• Profitability trends and operating cash flow generation in interim management accounts.
• Compliance with filing deadlines and any changes in company status or director appointments.