ENGINE POWER LTD

Executive Summary

ENGINE POWER LTD presents a high credit risk profile due to persistent and increasing negative net assets and severe liquidity shortfalls. The company’s financial position is unsustainable under current conditions, lacking the resources to meet short-term liabilities. Without corrective measures, credit approval is not recommended.

ENGINE POWER LTD - Analysis Report

Company Number: 13243248

Analysis Date: 2025-07-29 15:30 UTC

1. Credit Opinion: DECLINE. ENGINE POWER LTD shows significant and worsening negative net assets and net current liabilities over the last three years. Current liabilities have increased substantially, more than doubling from £41k in 2021 to over £106k in 2024, while current assets remain negligible (~£270). This indicates poor liquidity and an inability to meet short-term obligations. The company is a micro-entity with minimal equity (£1 share capital) and a single director who is also the main shareholder. The financial health is weak with no evidence of profitability or capital injection to offset losses. The risk of default is high without external support or restructuring.

2. Financial Strength: The balance sheet reveals deep negative net assets of £106k as of 31 March 2024, worsening from £37k negative in 2021. The company’s liabilities significantly exceed assets. Shareholders’ funds are negative, reflecting accumulated losses. Fixed assets appear minimal or nil, limiting collateral value. This financial structure shows high leverage and vulnerability to any adverse cash flow events. The absence of equity buffer undermines financial resilience.

3. Cash Flow Assessment: Operating liquidity is critically strained. Current assets (mainly cash and receivables) are only £270 while current liabilities stand at £106k, resulting in a negative working capital of £106k. This gap suggests the company cannot cover its short-term debts from readily available resources. The company's cash flow is likely insufficient to service obligations, pay suppliers, or meet payroll without additional funding. No indication of improved cash generation or capital injection exists.

4. Monitoring Points:

• Monitor any fresh capital injections or debt restructuring efforts.
• Track monthly cash flow statements if available to assess liquidity improvements.
• Watch creditor payment performance and any signs of supplier or creditor pressure.
• Review director’s trading intentions and any changes in business strategy to restore profitability.
• Confirm timely filing of accounts and returns to identify any further deterioration.