EICR SCOTLAND LTD

Executive Summary

EICR Scotland Ltd shows a generally stable and growing financial condition with positive liquidity and equity. However, working capital is tight, and current liabilities are relatively high, suggesting some cash flow management challenges. With targeted improvements in cash flow monitoring, working capital management, and potential growth investments, the company is well positioned for a healthy financial future.

EICR SCOTLAND LTD - Analysis Report

Company Number: SC700078

Analysis Date: 2025-07-29 19:15 UTC

Financial Health Assessment Report for EICR Scotland Ltd

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1. Financial Health Score: B

Explanation:
EICR Scotland Ltd demonstrates a generally stable financial condition with positive net current assets, positive shareholders’ funds, and a modest but growing asset base. The company is relatively young (incorporated 2021), operating in electrical installation, and maintains adequate liquidity and solvency for its size and stage. However, some caution is warranted due to limited scale, modest capitalisation, and relatively high short-term liabilities compared to assets, which suggests room for improvement in working capital management and growth financing.

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2. Key Vital Signs (Critical Metrics & Interpretation)

Metric	Value (Year End 31-May-2024)	Interpretation (Medical Analogy)
Current Assets	£11,346	Moderate level of liquid and receivable assets (healthy blood volume)
Cash at Bank	£7,775	Reasonable cash reserves (healthy pulse)
Debtors (Trade Receivables)	£3,571	Moderate pending payments from customers (oxygen delivery in progress)
Current Liabilities	£9,372	Payables and due taxes are relatively high (stress on heart due to workload)
Net Current Assets (Working Capital)	£1,974	Positive but tight working capital (breathing room is limited but present)
Total Assets Less Current Liabilities	£4,196	Company's adjusted asset base after short-term debts (overall body strength)
Shareholders’ Funds (Equity)	£4,196	Positive equity indicates net worth (good immune system)
Fixed Assets (Tangible)	£2,222	Investment in equipment and machinery (muscle mass)
Turnover (2022 only available)	£21,353	Early-stage revenue base (metabolic rate)
Employee Count	1	Very lean operation (single organ functioning efficiently)

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3. Diagnosis: Financial Condition Overview

EICR Scotland Ltd is a micro/small private limited company in the electrical installation sector showing signs of stable health but still in its growth phase. The company’s balance sheet reveals a positive net current asset position, indicating that it can cover its short-term liabilities with short-term assets, a crucial sign of liquidity health. Cash reserves are reasonably healthy relative to liabilities, implying adequate immediate payment capacity, akin to a healthy heart pumping blood effectively.

The company’s shareholders’ funds have grown from £153 in 2021 to £4,196 in 2024, reflecting accumulated retained earnings or capital injections, which is a positive sign of building equity or strength. Fixed assets have increased, showing investment in plant and machinery, which is essential for operational capacity.

However, current liabilities are relatively high compared to current assets, particularly taxation and social security obligations, which may indicate some strain on operational cash flow or timing mismatches in payments. The company operates with a minimal workforce, which is efficient but could limit growth without additional human resources.

The absence of an audit and minimal disclosure of the income statement limits the full diagnostic view, but available data suggests no immediate symptoms of financial distress such as insolvency risk or negative equity.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Improve Working Capital Management:
  Aim to reduce current liabilities or accelerate debtor collections to increase net current assets. This will ease liquidity pressure, providing a more robust financial “respiratory system” for daily operations.

• Cash Flow Forecasting and Monitoring:
  Implement rigorous cash flow projections to anticipate tax and creditor payments, avoiding “cardiac stress” from sudden large outflows.

• Consider Capital Injection or Loan Facilities:
  To fund growth or buffer liquidity, additional capital or a credit facility can strengthen the company’s “immune system” and support expansion.

• Expand Revenue Base and Diversify Clients:
  Increasing turnover and broadening the customer base will improve the company’s “metabolism” and overall vitality.

• Plan for Succession or Additional Staff:
  Operating with one employee (director) is efficient but may risk operational continuity and growth potential. Consider hiring or subcontracting to distribute workload and build resilience.

• Regular Financial Review and Reporting:
  Even though the company is exempt from audit, periodic internal reviews and possibly voluntary audits can detect early signs of distress and guide proactive management.

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