E J BARRETT SERVICES LIMITED
Executive Summary
E J Barrett Services Limited is a micro-entity with improving financial strength and liquidity, supported by a robust balance sheet and clear director control. Its ability to service debt appears sound at this stage, warranting credit approval with conservative limits. Ongoing monitoring of liabilities and financial performance is recommended to mitigate risks associated with its limited operating history.
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This analysis is opinion only and should not be interpreted as financial advice.
E J BARRETT SERVICES LIMITED - Analysis Report
Credit Opinion: APPROVE
E J Barrett Services Limited demonstrates a positive financial trajectory with improved net assets and working capital over the past two years. The company is active, has no overdue filings, and is managed by a single director who owns 100% of the shares, indicating clear control and accountability. The micro-entity classification limits financial complexity and risk exposure, making the company a suitable candidate for modest credit facilities. However, given its small scale and limited operating history (incorporated in 2022), credit limits should be conservative and contingent on ongoing monitoring.Financial Strength:
The company’s net assets increased from £4,709 in 2023 to £21,110 in 2024, driven by growth in current assets from £20,551 to £39,502 and a controlled increase in current liabilities from £9,526 to £16,892. The balance sheet shows a healthy working capital position with net current assets nearly doubling to £22,610. There are no long-term liabilities reported, and shareholders’ funds correspond to net assets, indicating no external equity dilution. Overall, the balance sheet is solid for a micro-entity, with low gearing risk.Cash Flow Assessment:
Current assets primarily consisting of cash and short-term receivables provide sufficient liquidity to cover current liabilities comfortably, as evidenced by a current ratio of approximately 2.34 (39,502 / 16,892) in 2024. The increase in both current assets and liabilities is consistent with business growth. The company employs one person (the director), minimizing payroll strain. Although detailed profit and loss data are unavailable, the consistent increase in net assets and working capital suggests positive cash flow from operations sufficient to meet short-term obligations.Monitoring Points:
- Maintain close observation of current liabilities growth to ensure it does not outpace asset growth, which could strain liquidity.
- Monitor turnover and profitability trends in future filings to confirm sustainable cash flow generation.
- Watch for any changes in director ownership or company structure that could impact control or financial stewardship.
- Ensure timely filing of accounts and confirmation statements continues to avoid regulatory penalties.
- Track any external financing or credit facilities taken on to assess leverage and repayment capacity.
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