Company Number: 13396678

Analysis Date: 2025-07-29 20:20 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   CWP Electrical Ltd demonstrates a modest but improving financial position with positive net current assets and net assets. However, the company is relatively young (incorporated in 2021) and has a small capital base (£100 share capital). The overdue accounts filing for the 2023 year end is a concern for compliance and governance, though it was subsequently filed by May 2025. The company’s liquidity has improved significantly with cash increasing from £675 to £3,953 and current liabilities reducing drastically from £6,095 to £997. Given these factors, a credit facility may be approved conditionally, subject to timely future filings and monitoring of working capital and cash flow trends.

2. Financial Strength:

• The company’s net assets increased from £1,072 in 2022 to £6,846 in 2023, reflecting retained earnings growth (£6,746 P&L reserve).
• Current assets stand at £7,843 (mainly cash and debtors), comfortably exceeding current liabilities of £997, yielding a strong net current asset position of £6,846.
• The balance sheet is unencumbered by long-term debt or fixed assets, indicating low financial leverage but also limited asset backing.
• The reduction in current liabilities from £6,095 in 2022 to £997 in 2023 likely improved working capital management and reduced short-term financial risk.

3. Cash Flow Assessment:

• Cash balances improved materially (£675 to £3,953), indicating stronger liquidity and improved ability to meet short-term obligations.
• Debtors decreased from £6,492 to £3,890, which suggests either improved collections or reduced sales on credit—both impacting working capital differently.
• Current liabilities declined substantially, indicating the company has paid down short-term obligations, which supports cash flow health.
• The company had a director loan repayment of £3,789 during the year, which improved creditor position but indicates reliance on director funding previously.
• Overall, liquidity is adequate for current operations but close monitoring of debtor aging and cash conversion cycles is recommended.

4. Monitoring Points:

• Ensure future statutory accounts and confirmation statements are filed on time to maintain compliance and avoid regulatory risks.
• Monitor debtor turnover and aging closely to prevent cash flow issues, given the relatively high debtor balances.
• Watch for any increase in short-term liabilities or director loans, which may indicate cash flow stress.
• Track profit margins and operational cash flow generation as the company matures to confirm sustainable earnings.
• Review management’s plans for growth and capital strengthening to reduce reliance on director advances.