Company Number: NI681819

Analysis Date: 2025-07-20 12:34 UTC

Financial Health Assessment for EDENBANE WIND LTD
As of financial year ending 31 December 2023

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1. Financial Health Score: B

Explanation:
EDENBANE WIND LTD demonstrates a strong and improving financial position with healthy liquidity and solid equity backing. The company’s net assets and working capital have increased significantly year-on-year, indicating robustness. However, the presence of unpaid share capital and a sizeable deferred tax provision suggests areas for cautious monitoring, preventing a top-tier (A) grade at this time.

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2. Key Vital Signs

Metric	2023 (£)	2022 (£)	Interpretation
Current Assets	301,925	175,817	Increased liquidity; good short-term resource availability.
Cash and Cash Equivalents	34,741	30,403	Stable cash position; sufficient immediate cash on hand.
Debtors	267,184	145,414	Significant receivables; need to monitor collection efficiency.
Current Liabilities	26,220	89,498	Decreased short-term obligations; positive cash flow impact.
Net Current Assets	275,705	86,319	Strong working capital, signaling healthy operational liquidity.
Fixed Assets (Net Book Value)	453,165	504,749	Slight decrease; possibly due to depreciation or disposals.
Total Assets Less Current Liabilities	728,870	591,068	Indicates net operational asset base; steady growth.
Net Assets (Shareholders’ Funds)	669,733	573,676	Solid equity base; shows profitability and retained earnings growth.
Share Capital (Called Up, Issued, Fully Paid)	401,145	401,145	A portion of share capital remains unpaid, reflected as a debtor.
Deferred Tax Provision	59,137	17,392	Large increase; potential future cash tax outflow risk.

Interpretation of Vital Signs:

• Liquidity ("Healthy cash flow"): The company exhibits a strong liquidity position with a current ratio (current assets/current liabilities) of approximately 11.5x (301,925/26,220) in 2023, which is exceptionally high. This suggests the company can comfortably cover its short-term debts.
• Working Capital ("Healthy operational buffer"): The substantial increase in net current assets from £86k to £275k indicates improved short-term financial health and operational efficiency.
• Asset Base ("Solid structural foundation"): Fixed assets remain substantial, reflecting investment in wind turbines and associated infrastructure critical for the electricity production business.
• Equity Growth ("Positive retained earnings"): Shareholders’ funds increased by nearly £96k, indicating the company is generating profits or retaining earnings effectively.
• Receivables ("Symptoms of potential cash collection risk"): Debtors nearly doubled, which may indicate extended credit terms or slower collection; a symptom to monitor to prevent cash flow strain.
• Deferred Tax ("Deferred liabilities"): The rise in deferred tax provision, more than tripling, suggests timing differences on tax payments possibly due to capital allowances. While not an immediate cash outflow, it represents a future tax liability that needs prudent management.

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3. Diagnosis

EDENBANE WIND LTD shows signs of a "healthy financial patient" with strong liquidity and a growing equity base, indicative of solid profitability and efficient asset utilization in a capital-intensive sector (electricity production). The company's ability to reduce current liabilities significantly while increasing current assets is a positive symptom of good financial management and operational cash flow.

However, the presence of unpaid share capital (£98,855) recorded as debtors (amounts owed to the company) is a mild concern. This unpaid capital could represent a risk if the funds are not collected timely, as it ties up resources that could otherwise strengthen cash reserves.

The deferred tax liability increase is a cautionary sign that reflects timing differences in tax treatment of capital investments. While common in asset-heavy industries, it requires forward planning to ensure future cash tax payments do not disrupt liquidity.

The high level of trade and other debtors, while boosting current assets, may mask underlying risks if collections slow down. This could manifest as "symptoms of distress" if not addressed.

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4. Recommendations

• Improve Receivables Management: Implement stricter credit control policies and regular monitoring of debtor aging to ensure timely cash inflows and prevent liquidity bottlenecks.
• Collect Unpaid Share Capital: Actively pursue payment of the outstanding £98,855 in unpaid share capital to strengthen cash reserves and reduce balance sheet risk.
• Plan for Deferred Tax Liability: Develop a tax planning strategy to manage the sizeable deferred tax provision and ensure sufficient cash flow is available when tax liabilities crystallize.
• Monitor Fixed Asset Depreciation: Review the asset base and depreciation policies to ensure assets are being utilized efficiently and assess if any disposals or impairments are required.
• Maintain Strong Liquidity Buffer: Continue to hold a robust cash position to buffer against market volatility or unexpected operational expenses common in the renewable energy sector.
• Regular Financial Health Checks: Conduct quarterly reviews of financial metrics to detect early any "symptoms" of financial stress, particularly focusing on working capital and tax obligations.

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Medical Analogy Summary

EDENBANE WIND LTD’s financial "vital signs" indicate a generally healthy business with robust liquidity and growing equity akin to a patient with strong cardiovascular health and good metabolic function. The "symptoms" of increased receivables and deferred tax liabilities are early warning signs — like mild inflammation — that require attentive management to prevent future complications. With proactive "treatment" in receivables collection and tax planning, the company’s prognosis is favorable for sustained financial wellness.

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