ETE SOFTWARE HARDWARE LTD

Executive Summary

ETE SOFTWARE HARDWARE LTD has experienced a sharp decline in financial position over the past year, moving into net liabilities and facing significant liquidity constraints. The company’s balance sheet weakness and negative working capital pose a high risk for credit extension at present. Close monitoring of cash flow and creditor relations is essential before reconsidering credit facilities.

ETE SOFTWARE HARDWARE LTD - Analysis Report

Company Number: 12719252

Analysis Date: 2025-07-20 18:54 UTC

1. Credit Opinion: DECLINE
   ETE SOFTWARE HARDWARE LTD exhibits a significant deterioration in financial health over the latest fiscal year. The company moved from a positive net asset position of £14,252 in 2023 to a net liability of £9,547 in 2024, driven primarily by an increase in current liabilities (£36,427 vs. £27,267) and a sharp reduction in cash balances (£2,544 vs. £17,636). This negative net working capital raises concerns about the company’s ability to meet short-term obligations without additional funding or restructuring. The lack of profitability disclosures and the absence of an auditor’s report further limit assurance on financial reliability. Given this liquidity strain and weakened balance sheet, extending credit facilities without significant mitigating factors is not recommended.

2. Financial Strength:
   The balance sheet shows decline: current assets decreased from £41,519 to £26,880, while current liabilities increased by approximately 33%. The company’s net assets turned negative, implying insolvency on a balance sheet basis. Shareholders’ funds eroded from a positive £14,252 to a deficit of £9,547, reflecting accumulated losses or write-downs not offset by capital injections (share capital remains nominal at £1). The company operates with minimal equity buffer and elevated short-term creditor exposure, indicating weak financial resilience.

3. Cash Flow Assessment:
   Cash reserves have diminished dramatically, from £17,636 to £2,544, severely restricting operational liquidity. Debtors remain relatively stable, but their collection terms or realizability cannot be confirmed and may be contributing to working capital pressure. Negative net current assets suggest a reliance on creditor financing or external funding to sustain day-to-day operations. The company employs only one staff member, which may limit fixed overheads but also implies limited operational scale.

4. Monitoring Points:

• Track quarterly cash flow statements to confirm if liquidity improves or deteriorates further.
• Monitor creditor payment patterns and any overdue liabilities to assess risk of supplier pressure or insolvency triggers.
• Observe any capital injections or restructuring efforts that could shore up equity and working capital.
• Review director changes and related governance signals, especially given recent director turnover.
• Watch for updated financial filings and any auditor reviews that might clarify profit and loss performance.