EVERGREEN DRAINAGE SOLUTIONS LIMITED
Executive Summary
Evergreen Drainage Solutions Limited is a very small, micro-entity with extremely limited financial resources and a narrowly positive net asset position. While the company is compliant with statutory requirements and operationally stable, its minimal working capital and equity base present credit risk that requires cautious facility sizing and close monitoring. Credit may be conditionally approved with safeguards reflecting the tight liquidity and modest financial strength.
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This analysis is opinion only and should not be interpreted as financial advice.
EVERGREEN DRAINAGE SOLUTIONS LIMITED - Analysis Report
Credit Opinion: CONDITIONAL APPROVAL
Evergreen Drainage Solutions Limited is a micro-entity operating in remediation and waste management since December 2020. The company shows a positive but very modest net asset position (£503 as of June 2024) and minimal working capital. While the limited scale and very thin equity base present a risk, the business is current with filings and has no overdue accounts or returns. Given the small size and narrow financial buffer, credit should be extended cautiously, ideally with limits aligned to the company's capacity and potentially supported by personal guarantees or collateral. Monitoring will be important due to the limited financial strength.Financial Strength:
The balance sheet reveals extremely low net assets and working capital (net current assets of £503 in 2024, down from £784 in 2020). Current assets have decreased significantly from £114k in 2022 to £65k in 2024, while current liabilities remain high and close to current assets, indicating tight liquidity. Shareholders’ funds remain minimal (£503) and are essentially equal to net assets, reflecting no long-term debt presence but also very low equity cushion. The company’s financial position is fragile but stable with no evidence of accumulated losses or negative equity.Cash Flow Assessment:
Current assets mainly represent liquid or short-term receivables and cash balances sufficient to cover current liabilities by a slim margin, suggesting very tight working capital management. The net current asset figure just above zero shows minimal liquidity buffer, which could easily be eroded by operational delays or unforeseen expenses. The company employs only one person, limiting fixed overheads and cash burn. Cash flow is likely modest and closely balanced, so the business may struggle to absorb shocks without additional funding.Monitoring Points:
- Monitor quarterly trading performance and cash flow statements to ensure working capital does not deteriorate further.
- Watch for any increase in current liabilities relative to current assets which would indicate liquidity stress.
- Track receipt of statutory filings on time to confirm ongoing management discipline.
- Review any changes in ownership/control or director appointments that could affect governance.
- Observe market conditions impacting remediation activities, especially regulatory or environmental policy shifts that could affect revenues.
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