EDSP SOLUTIONS LIMITED

Executive Summary

EDSP Solutions Limited shows encouraging growth with a strong balance sheet and liquidity for a micro-entity under two years old. The company’s financial position and governance structure support credit approval, though ongoing monitoring of cash flow and leverage is advised as it scales. Overall, the company appears well-positioned to meet debt obligations responsibly.

EDSP SOLUTIONS LIMITED - Analysis Report

Company Number: 14365436

Analysis Date: 2025-07-20 16:15 UTC

1. Credit Opinion: APPROVE
   EDSP Solutions Limited demonstrates solid financial growth and a strong net asset base for a micro-entity incorporated less than two years ago. The company shows an improving balance sheet, with net assets rising from £103,756 to £336,437 in the latest financial year and positive working capital. There is no indication of overdue filings or director disqualifications, and the management team includes multiple directors and a finance director, suggesting sound governance. The company operates in electrical installation, a stable sector with ongoing demand. Overall, the company appears capable of servicing credit facilities with manageable risk.

2. Financial Strength:
   The balance sheet indicates significant asset growth, particularly fixed assets increasing from £21,746 to £107,513 and current assets more than doubling to £636,256, primarily cash or equivalents and receivables. Current liabilities have increased but remain comfortably covered by current assets, resulting in a strong net current asset position of £295,940. The presence of £67,016 in long-term liabilities is moderate relative to net assets of £336,437, implying a reasonable capital structure without excessive leverage. Shareholders’ funds have more than tripled, reflecting retained earnings and capital contributions. The company maintains a sound equity base for its size and stage of development.

3. Cash Flow Assessment:
   While detailed cash flow statements are not provided, the significant increase in current assets and net current assets suggests good liquidity and working capital management. Current liabilities are well covered, indicating the company should have sufficient short-term liquidity to meet obligations. The stable average employee count at 8 supports consistent operational scale without rapid expansion risks. The absence of overdue accounts or filings further supports the likelihood of prudent cash flow management.

4. Monitoring Points:

• Track ongoing profitability and cash flow trends as the company matures to confirm sustained ability to service debt.
• Monitor any increases in long-term liabilities to ensure leverage remains manageable.
• Watch for changes in working capital ratios, particularly receivables and payables days, which could impact liquidity.
• Review any significant changes in ownership or director appointments that could affect governance or control.
• Evaluate sector conditions in electrical installation for potential impact on contract pipelines and revenue stability.