ECHO ELECTRIC GATES LTD

Executive Summary

Echo Electric Gates Ltd is an early-stage private company with modest financial resources and reliance on director loans for funding. While liquidity appears adequate in the short term and compliance is up to date, the declining net assets and lack of employees warrant caution. Further due diligence on operational viability and financial performance is recommended before investment.

ECHO ELECTRIC GATES LTD - Analysis Report

Company Number: 13917996

Analysis Date: 2025-07-29 20:43 UTC

1. Risk Rating: MEDIUM

Justification: The company, Echo Electric Gates Ltd, is a very young private limited company incorporated in 2022 and operating in the manufacture of electrical equipment. The latest accounts show modest net assets and a small working capital base. There is director funding evidenced by loans, and no employees. While current liabilities are covered by current assets, the presence of director loans and a declining net asset base signals a moderate risk profile for solvency and liquidity.

2. Key Concerns:

• Reliance on Director Loans: The company has director loans amounting to £10,000 (up from £5,000 the previous year), which constitute a significant portion of liabilities and indicate dependence on director funding rather than operational cash flow.
• Declining Net Assets: Net assets decreased from £5,641 in 2023 to £5,212 in 2024, suggesting erosion of equity possibly due to losses or asset depreciation.
• No Employees and Limited Scale: The company reported zero employees on average, indicating a very small or possibly owner-operated business with limited operational scale. This may affect sustainability and growth prospects.

3. Positive Indicators:

• Current Assets Exceed Current Liabilities: Net current assets increased from £2,358 to £8,879, indicating improved short-term liquidity.
• Timely Filing and Compliance: The company is current with its accounts and confirmation statement filings, showing adherence to regulatory requirements.
• Active Website and Contact Information: Presence of an active website and contact details may support operational legitimacy and customer engagement.

4. Due Diligence Notes:

• Investigate the nature and terms of the director loans, including repayment schedules and any associated risks.
• Review profit and loss details (not provided) to assess profitability trends and causes of net asset decline.
• Confirm the business model and operational capacity given the absence of employees and relatively low fixed assets.
• Assess customer base, order pipeline, and revenue stability as these are not disclosed.
• Verify any contingent liabilities or off-balance sheet risks not apparent from the balance sheet.