EGG ENGINEERING LIMITED

Executive Summary

EGG ENGINEERING LIMITED shows early signs of financial stability with growing net assets but currently has negative working capital and limited cash reserves, indicating short-term liquidity risks. Given its short trading history and small scale, credit provision should be conditional with close monitoring of cash flow and working capital improvements. Additional credit support may be advisable to mitigate liquidity pressures.

EGG ENGINEERING LIMITED - Analysis Report

Company Number: 13828177

Analysis Date: 2025-07-29 20:24 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   EGG ENGINEERING LIMITED is a very recently established private limited company (incorporated in 2022) operating in machinery repair. The company currently shows a positive net asset position and shareholders’ funds of £8,522 as at 31 January 2024, an improvement from £4,951 the previous year. However, the company exhibits negative working capital (-£6,517) indicating liquidity challenges and potential short-term cash flow pressure. Given the limited trading history, small scale (only one employee), and negative net current assets, I recommend conditional approval subject to monitoring and possibly requiring personal guarantees or other credit support.

2. Financial Strength
   The balance sheet reflects a small fixed asset base (£15,039) primarily in machinery and equipment, stable but modest equity funding (£8,522), and a low level of current assets (£1,000) insufficient to cover current liabilities (£7,517). The company’s net assets have increased, indicating some capital injection or retained earnings, but the negative working capital is a concern. The company does not have significant cash reserves and trade receivables are minimal (£1,380).

3. Cash Flow Assessment
   Cash position is limited to £1,000, and current liabilities are about 7.5 times higher. This suggests the company relies on timely collection of receivables or additional funding to meet short-term obligations. The average employee count of one suggests low overheads, but the company’s ability to generate positive operating cash flow is unproven due to lack of income statement data. There is a risk that delayed payments or unexpected expenses could cause liquidity stress.

4. Monitoring Points

• Working capital and liquidity trends: Watch for improvement in current assets versus current liabilities.
• Profitability and cash flow generation: Review future accounts to confirm ability to generate sustainable earnings and positive cash flow.
• Director’s financial support or additional capital injections: Monitor for any shareholder loans or equity funding to support liquidity.
• Payment history on any credit facilities or supplier terms: Ensure timely repayments and avoid late payment risks.