DOONFOOT ELECTRICAL SERVICES LTD

Executive Summary

Doonfoot Electrical Services Ltd shows a declining financial position characterized by persistent negative working capital and erosion of shareholder funds, reflecting weak financial resilience. The company’s micro size and sole ownership limit its ability to manage liquidity challenges, leading to concerns about its capacity to meet short-term obligations. Based on current data, credit approval is not recommended without significant improvements or guarantees.

DOONFOOT ELECTRICAL SERVICES LTD - Analysis Report

Company Number: SC712229

Analysis Date: 2025-07-29 16:58 UTC

1. Credit Opinion: DECLINE
   Doonfoot Electrical Services Ltd presents a weak credit profile. The company shows persistent net current liabilities over the past three years, indicating working capital deficits and potential liquidity stress. Shareholders’ funds have steadily declined from £14,698 in 2021 to £3,873 in 2024, suggesting erosion of equity and limited financial buffer. Given the small scale (micro entity), single employee, and concentrated ownership, the business lacks diversification and scale to absorb adverse shocks. The negative net current assets position raises concerns over the company’s ability to meet short-term obligations without additional financing or capital injection. Consequently, the risk of payment default or delayed payments is elevated, and credit extension is not advised without substantial mitigating factors.

2. Financial Strength:
   The balance sheet reflects a low asset base with fixed assets decreasing from £20,406 in 2021 to £13,480 in 2024. Current assets have fluctuated but remain insufficient to cover current liabilities, resulting in net current liabilities of £9,607 at the latest year-end. Total assets less current liabilities have diminished from £14,698 in 2021 to £3,873 in 2024, indicating deteriorating net asset value. The shareholder funds decline corroborates weakening financial strength and limited retained earnings or capital reserves. The company’s micro classification and single director/owner structure limit operational scale and financial flexibility.

3. Cash Flow Assessment:
   Persistent negative working capital signals cash flow constraints. Current liabilities exceed current assets significantly, suggesting the company may rely on external financing, delayed supplier payments, or director loans to fund operations. Lack of an audit and limited disclosure on profit and loss further obscure cash flow visibility. The single-employee setup and low asset base imply limited operational complexity but also limited capacity to generate strong cash inflows. Without clear evidence of positive cash flows or capital injections, liquidity risk is elevated.

4. Monitoring Points:

• Quarterly updates on current assets and liabilities to track working capital trends.
• Any changes in ownership or director appointments that may affect governance.
• Evidence of capital injection or external financing to support liquidity.
• Timely filing of annual accounts and confirmation statements to ensure compliance and transparency.
• Profitability indicators or cash flow statements if available in future filings to assess operational performance improvements.