Company Number: 13311863

Analysis Date: 2025-07-19 12:24 UTC

1. Credit Opinion: DECLINE. E G Groundworks Ltd demonstrates a deteriorating financial position with negative net assets and significant liabilities exceeding assets as of the latest accounts (2024). The company’s net current liabilities and long-term creditors have increased substantially compared to the prior year, indicating strained liquidity and solvency concerns. Given the micro-entity status and lack of audit, there is limited transparency on profitability and cash flows, raising further risk in lending or extending credit without substantial security or guarantees.

2. Financial Strength: The balance sheet shows a marked decline in financial strength from a positive net asset position of £722 in 2023 to a negative net asset position of £36,190 in 2024. Fixed assets have doubled, likely financed by increased creditors, as current liabilities surged from £41,805 to £75,851 and long-term liabilities from £47,334 to £70,280. The negative shareholders’ funds reflect accumulated losses or revaluation deficits. This indicates over-leverage and an erosion of equity, impairing the company’s ability to absorb financial shocks.

3. Cash Flow Assessment: Current assets have dropped significantly from £45,851 to £19,885 while current liabilities have risen sharply, resulting in a net current liability position of £55,966, worsening from a net current asset position in the prior year. This suggests a working capital deficit and potential cash flow strain. The company’s ability to meet short-term obligations is compromised, which may delay payments to suppliers or creditors and increase reliance on external financing.

4. Monitoring Points:

• Track changes in net current assets/liabilities for signs of improving liquidity.
• Monitor the trend in total creditors and whether repayment terms are being met.
• Review interim management accounts for profitability and cash generation.
• Assess director actions on restructuring or capital injections to restore financial health.
• Watch for any late filing or changes in company status that may indicate distress.