ERNEST & ALBAN LIMITED

Executive Summary

Ernest & Alban Limited has a stable asset base in real estate but carries significant liabilities and negative working capital, constraining liquidity. The company’s micro scale and limited equity require cautious credit consideration, recommending conditional approval subject to assurances on cash flow and possible additional security. Close monitoring of liquidity and creditor management is essential to mitigate credit risk.

ERNEST & ALBAN LIMITED - Analysis Report

Company Number: 13970921

Analysis Date: 2025-07-29 19:49 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Ernest & Alban Limited shows a very modest net asset position (£9,077) with a substantial amount of long-term liabilities (£681,840) closely matching fixed assets (£981,500). The company operates in real estate letting, which can generate stable income, but the micro-entity scale and minimal working capital (£-290,583) raise concerns about liquidity and debt servicing capacity. The company has no employees and is wholly controlled by a single director, which suggests concentrated management risk. Approval is possible if additional security or guarantees are provided, or if cash flow projections demonstrate sufficient debt coverage.

2. Financial Strength:
   The balance sheet reflects a thin equity base with net assets just above zero after accounting for large creditor balances both short-term and long-term. Fixed assets are significant and likely represent property holdings, but the current liabilities exceed current assets by a large margin, indicating tight short-term financial flexibility. The small shareholder funds and negative net current assets highlight financial vulnerability, although the consistent fixed asset value suggests asset stability.

3. Cash Flow Assessment:
   Current liabilities substantially outweigh current assets, yielding a negative working capital position (-£290,583), which signals potential liquidity stress. The company has no recorded employees and minimal current assets (£69,782), which may limit operating overheads but also reduces cash reserves. Without positive net current assets or clear evidence of income streams, the ability to meet short-term obligations and service debt is uncertain.

4. Monitoring Points:

• Track quarterly cash flow statements to ensure sufficient liquidity to cover current liabilities.
• Monitor rent or lease income stability and collection performance from real estate operations.
• Watch for any increases in creditor balances or delays in payments.
• Review director’s financial support or personal guarantees if required.
• Observe any changes in fixed assets valuation or disposals that may affect collateral value.