ENCORE HOME IMPROVEMENTS LIMITED

Executive Summary

Encore Home Improvements Limited is a financially stable micro-entity with improving equity and strong liquidity, demonstrating capacity to meet short-term obligations. The company’s limited trading history warrants cautious credit exposure but its clean financial position and management control support approval on standard terms. Ongoing monitoring of working capital and director-related balances is recommended to mitigate risk.

ENCORE HOME IMPROVEMENTS LIMITED - Analysis Report

Company Number: 13143218

Analysis Date: 2025-07-29 20:50 UTC

1. Credit Opinion: APPROVE
   Encore Home Improvements Limited demonstrates a solid financial footing for a micro-entity with improving net current assets and shareholders’ funds over the latest financial year. The company is actively managed by a single director who holds full control, and there are no signs of financial distress such as overdue filings or negative working capital at year-end. The business is relatively young but shows positive growth in equity and liquidity, supporting its ability to meet short-term obligations and service modest credit facilities. However, given the limited trading history and micro size, credit approval should be on standard terms with a moderate credit limit reflecting its scale.

2. Financial Strength:
   The balance sheet as of 31 January 2024 shows total fixed assets of £4,421 and current assets of £24,499, primarily cash or equivalents and receivables, against current liabilities of £6,637, resulting in net current assets of £17,862. Total liabilities including a small amount of long-term creditors (£212) and accruals (£985) are minimal. Shareholders’ funds have grown markedly from £4,103 in 2023 to £21,086 in 2024, indicating retained earnings accumulation or capital injection. The gearing is negligible, and the company has a positive net asset position, reflecting financial stability.

3. Cash Flow Assessment:
   Liquidity appears strong with current assets significantly exceeding current liabilities, indicating good short-term liquidity and working capital management. The company employs one staff member (the director) which keeps operating overheads low. The director’s advances and credits account shows small ongoing transactions with the company that do not raise concern. No external debt appears significant, and the company is not reliant on borrowings. Cash flow from operations is not explicitly disclosed but implied to be sufficient to maintain positive working capital.

4. Monitoring Points:

• Track continued growth in net current assets and shareholders’ funds to ensure sustained financial improvement.
• Monitor the director advances account to ensure it remains manageable and does not create hidden liabilities.
• Watch for any changes in trade creditors or accruals that may indicate emerging cash flow stress.
• Confirm timely filing of annual accounts and confirmation statements to avoid compliance risks.
• Monitor revenue growth and profitability trends as more detailed financial disclosures become available.