Company Number: 13886482

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

1. Credit Opinion: CONDITIONAL APPROVAL
   E.T Electrical Solutions Ltd is a very young micro-entity operating in electrical installation since 2022. The company is currently active with no overdue filings and a single director who is also the sole owner. However, the latest financials show net current liabilities and a marked decline in net assets from £332 in 2023 to £105 in 2024, indicating tightening liquidity and leveraged balance sheet. The company’s ability to service debt is constrained by negative working capital. Credit approval is possible but should be conditional on monitoring cash flow closely and possible provision of additional security or personal guarantees given the fragile net asset base.

2. Financial Strength:
   The balance sheet shows modest fixed assets (£9.7k) with current assets (£10.9k) insufficient to cover current liabilities (£13.7k), resulting in net current liabilities of £2.9k. Additionally, long-term creditors amount to £6.8k, leaving net assets at a low £105, down from £332 the previous year. This deterioration signals a weakening financial position and limited buffer to absorb shocks. Shareholder funds are minimal, reflecting the micro nature but also heightened risk. The decline in fixed assets and increase in creditors suggests potential operational or financial pressure.

3. Cash Flow Assessment:
   Working capital is negative, indicating potential liquidity stress. Current liabilities exceed current assets, which raises concerns about the company’s ability to meet short-term obligations without external support. The company employs only 2 people, which may help control overhead costs, but the limited cash resources and growing creditor commitments reduce operational flexibility. Cash flows should be closely monitored, and debtor collections and creditor payments managed carefully to avoid cash traps.

4. Monitoring Points:

• Net current assets/liabilities trend for signs of liquidity improvement or deterioration.
• Timeliness and completeness of future accounts and confirmation statement filings.
• Changes in creditor balances, especially short-term creditors.
• Any further capital injections or shareholder loans that improve net asset position.
• Director conduct and any new appointments or changes.
• Business growth indicators such as revenue and profitability trends (not available here but to be requested).