ELMDON WINDOWS AND CONSTRUCTION LIMITED

Executive Summary

Elmdon Windows and Construction Limited is a newly established company with a fragile balance sheet characterized by negative working capital and small equity. Its liquidity position is constrained by significant short-term liabilities and finance lease obligations, posing repayment risks. Conditional credit approval is recommended with strict monitoring of cash flow and working capital management to ensure ongoing financial stability.

ELMDON WINDOWS AND CONSTRUCTION LIMITED - Analysis Report

Company Number: 15081450

Analysis Date: 2025-07-29 14:06 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Elmdon Windows and Construction Limited is a recently incorporated private limited company (2023) operating in glazing and construction installation. The company shows modest net assets (£2,919) and a small shareholder capital base (£2). It has a negative net working capital position (-£14,527), primarily due to current liabilities exceeded by current assets. The presence of finance lease obligations totaling £19,494 adds fixed debt commitments. While the company is operationally active and filings are up to date, the negative working capital and reliance on hire purchase contracts introduce liquidity risk. Approval is conditional on monitoring cash flow closely and possibly securing additional liquidity or guarantees to cover short-term liabilities.

2. Financial Strength:

• Fixed assets of £21,940 mainly represent plant, machinery, and motor vehicles.
• Current assets (£43,003) include work in progress (£8,750), debtors (£31,196), and cash (£3,057).
• Current liabilities stand at £57,530, including £15,000 due within a year on finance leases and other creditors of £33,136 plus taxation.
• The company has net assets of £2,919 after deducting long-term finance lease obligations (£4,494).
• Shareholders' funds are minimal, reflecting the company's early stage and limited retained earnings.

Overall, the balance sheet is fragile with negative working capital and low equity cushion, indicating limited financial strength.

3. Cash Flow Assessment:

• Cash on hand is low at £3,057 relative to short-term liabilities of £57,530, which presents immediate liquidity pressure.
• Debtors (£31,196) and work in progress (£8,750) could convert to cash but timing and collectability risk exist.
• Finance lease payments totaling nearly £20k over five years create fixed financial commitments that reduce flexibility.
• Negative net current assets (-£14,527) suggest working capital management needs improvement to avoid cash shortfalls.
• No profit and loss details provided, but the small retained earnings suggest limited internal cash generation to date.

4. Monitoring Points:

• Liquidity ratios, specifically current ratio and quick ratio, to track improvements or deterioration in working capital.
• Timeliness of debtor collections and realization of work in progress into cash flow.
• Ability to meet finance lease and other creditor payments on schedule.
• Any additional capital injections or credit facilities secured to bolster liquidity.
• Directors’ management of operational cash flow and cost controls given the early stage of the business.