CROSSED WIRES ENGINEERING LIMITED

Executive Summary

CROSSED WIRES ENGINEERING LIMITED is a micro-entity with modest but stable net assets and positive working capital, supporting short-term liquidity. However, very low turnover and limited scale pose business risk, warranting approval with conditions and ongoing monitoring of revenue and cash flow performance. The company’s financial position is adequate for current operations but requires careful oversight to mitigate potential risks from low income levels.

CROSSED WIRES ENGINEERING LIMITED - Analysis Report

Company Number: SC653635

Analysis Date: 2025-07-20 15:38 UTC

1. Credit Opinion: APPROVE with conditions CROSSED WIRES ENGINEERING LIMITED demonstrates a stable financial position for a micro-entity with consistent net assets and manageable current liabilities. However, the very low turnover and limited scale of operations suggest exposure to business risk and limited cash inflows. Approval is recommended with conditions such as monitoring ongoing trading performance and requiring updated financials if turnover or liabilities increase significantly.

2. Financial Strength: The balance sheet shows modest fixed assets (£1,300) and current assets (£15,499) primarily composed of cash or receivables. Current liabilities stand at £9,945, yielding positive net current assets of £5,554 and net assets of £6,854 as at 29 February 2024. The company’s shareholders’ funds have decreased slightly from £7,729 in 2023 to £6,854 in 2024, indicating a slight decline but overall maintained equity. The absence of long-term debt reduces financial risk. The micro-entity status and small share capital (£1) limit capital buffer, but the net asset position is adequate for the scale.

3. Cash Flow Assessment: Current assets exceed current liabilities by a healthy margin, suggesting adequate short-term liquidity. The net current assets of £5,554 reflect positive working capital, allowing the company to meet its short-term obligations. However, turnover is very low (£7,293 in 2023, with no turnover reported in 2024 accounts), which raises concerns about operating cash flow sustainability. The company employs a single person, which limits overheads but also scalability. Close attention should be paid to cash generation from operations going forward.

4. Monitoring Points:

• Turnover trends: The company’s turnover dropped significantly after 2021; understanding the reasons and prospects for revenue growth is critical.
• Cash flow from operations: Monitor cash receipts and working capital cycles to ensure ongoing liquidity.
• Current liabilities: Watch for any increases that might strain liquidity.
• Director involvement: As the sole director is also the consultant, assess continuity risk and governance.
• Filing compliance: Accounts and confirmation statements are up to date, continue to ensure timely filings.