Company Number: 12744170

Analysis Date: 2025-07-20 18:47 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   EWC Recycling Ltd is a small private limited company engaged in non-hazardous waste treatment. The company has shown positive net assets for the last three years after recovering from initial losses, which suggests improving financial stability. However, the net current assets declined from £3,816 in 2023 to £1,085 in 2024, indicating a tightening liquidity position. The company’s cash reserves have decreased but remain positive at £5,807. The small share capital (£100) signals limited equity buffer. No audit has been performed, and turnover figures are not disclosed, limiting full credit risk assessment. Approval is conditional on monitoring cash flow closely and confirming turnover and profitability trends.

2. Financial Strength:
   The balance sheet shows modest net assets of £1,085 as of July 2024, down from £3,444 the previous year. This decline corresponds with an increase in current liabilities (from £3,912 to £4,722) and a reduction in current assets primarily due to lower cash balances. The company has no fixed assets disclosed, implying reliance on working capital and cash flow rather than tangible asset backing. The shareholder funds are minimal but positive, reflecting some retained earnings after earlier losses. Overall, the company is solvent but with limited financial cushioning.

3. Cash Flow Assessment:
   Cash on hand decreased from £7,728 in 2023 to £5,807 in 2024, which alongside rising current liabilities, compresses the working capital to just £1,085. The net current assets remain positive, indicating the company can meet short-term obligations, but the margin is narrow. The absence of trade creditors suggests prompt payment practices or low supplier credit, which may pressure cash flow. Two employees indicate a very small operating scale, which could limit fixed overheads but also constrains revenue potential. Monitoring liquidity is critical, as the company’s ability to generate cash from operations is not clearly evident from the accounts.

4. Monitoring Points:

• Track cash balances and current liabilities quarterly to watch liquidity trends.
• Obtain turnover and profit & loss data to assess operational profitability and cash generation.
• Review changes in trade and other payables to understand supplier credit terms and payment behavior.
• Monitor any movements in net assets, especially if further declines occur.
• Confirm director’s plans for capital injections or financing if liquidity tightens.
• Watch for timely filing of future accounts and confirmation statements to ensure compliance and transparency.