Company Number: 13478738

Analysis Date: 2025-07-29 15:53 UTC

1. Credit Opinion: DECLINE
   DR SPARX ELECTRICAL LTD shows a persistently negative net asset position worsening from -£5,578 in 2021 to -£14,224 by June 2024. The company is highly leveraged with current liabilities far exceeding current assets, resulting in a significant working capital deficit (-£20,624 as of 2024). Such financial distress indicates a weak ability to meet short-term obligations and service debt. The absence of audited accounts and minimal financial disclosures limit transparency. Overall, the financial risk is high and the company’s capacity to repay new credit facilities is doubtful at this time.

2. Financial Strength:
   The balance sheet is weak with negative net assets and shareholders’ funds, indicating accumulated losses eroding equity. Fixed assets are minimal (£6,400), providing little security for lending. Current liabilities have increased substantially, especially “Other creditors” which jumped from £16,165 in 2023 to £28,153 in 2024, suggesting rising short-term obligations or supplier credit. The company’s gearing is concerning with bank borrowings appearing for the first time in 2024 (£1,567). Overall, the financial foundation is fragile.

3. Cash Flow Assessment:
   Cash at bank is very low (£502), and trade debtors, though increased, are insufficient to cover current liabilities. The company’s working capital is negative and deteriorating, indicating liquidity stress. The rise in creditors, particularly other creditors, could reflect deferred payments or operational cash flow challenges. Given the negative net current assets and minimal cash balances, immediate liquidity risks exist, limiting the company’s ability to absorb financial shocks or fund growth.

4. Monitoring Points:

• Monitor monthly cash flow forecasts closely to assess liquidity improvements or worsening.
• Track debtor collection efficiency and ageing to ensure receivables convert timely to cash.
• Watch creditor payment terms and any increases in short-term borrowings or overdrafts.
• Review profitability trends and accumulation of losses in subsequent accounts.
• Assess any director interventions or financial restructuring plans to improve solvency.