EW TREE SERVICES LTD

Executive Summary

EW Tree Services Ltd demonstrates a deteriorating financial position with negative net assets and significant liquidity shortfalls, raising serious concerns about its ability to service debt. Given the lack of positive cash flow indicators and worsening balance sheet metrics, credit exposure is not recommended at this time without substantial financial improvement or additional security. Close monitoring of cash flow and liabilities is essential if the company’s situation changes.

EW TREE SERVICES LTD - Analysis Report

Company Number: 13221336

Analysis Date: 2025-07-29 12:19 UTC

1. Credit Opinion: DECLINE
   EW Tree Services Ltd presents a concerning credit profile. The company has been trading since 2021 but shows a persistent and worsening net liability position, with shareholders’ funds deeply negative at £-36,788 as of July 2024, down from £3,405 in 2021. The significant net current liabilities (£-37,194) and overall negative net assets indicate a weak capital structure and poor financial resilience. This undermines the company’s ability to service new or existing debt reliably. Without evidence of improving profitability or cash flow, the risk of default is high.

2. Financial Strength:
   The balance sheet reveals very limited fixed assets (£8,905) and a heavily negative working capital position driven by current liabilities exceeding current assets by over £37k. The decline from a positive net asset position in 2021 to a substantial deficit in 2024 highlights ongoing losses or cash drain. The company’s micro-entity status and small scale limit its financial flexibility. The absence of retained earnings and accumulated losses reflected in negative shareholders’ funds further weaken the financial base.

3. Cash Flow Assessment:
   Negative current assets and large creditors due within one year suggest liquidity challenges. The company’s inability to maintain positive net current assets hinders its capacity to meet short-term obligations without external funding. No audit or profit and loss details were filed, limiting insight into operational cash generation, but the balance sheet trend implies sustained cash outflows or undercapitalization.

4. Monitoring Points:

• Track quarterly cash flow statements to assess liquidity improvements or further deterioration.
• Monitor any changes in creditors and current liabilities to detect pressure buildup or restructuring efforts.
• Watch for filing of profit and loss accounts to evaluate profitability trends.
• Review director actions or capital injections that might stabilize the financial position.