Company Number: 14262249

Analysis Date: 2025-07-29 15:49 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   FUSES ELECTRICAL LTD is a very small, micro-entity with limited financial history, incorporated in mid-2022. The latest accounts show a net asset position but with negative working capital and current liabilities exceeding current assets by approximately £10.8k, indicating potential liquidity pressure. The company’s ability to service short-term obligations is weak at present. However, there is no indication of insolvency or overdue filings, and the sole director/owner, Mr. Matthew McGarry, appears stable with full control. Credit approval could be considered on a conditional basis, requiring close monitoring of cash flow and working capital improvements.

2. Financial Strength:
   The balance sheet is very modest, with fixed assets around £12.4k and net assets reduced to £1.6k from £10.4k the prior year. The decline in net assets suggests the company may have incurred losses or drawn down equity, reducing its financial buffer. The negative net current assets position is a concern, reflecting current liabilities (£39.2k) exceeding current assets (£27.6k plus £0.8k prepayments). This implies the company may rely on external financing or director support to meet short-term obligations. Overall, the financial strength is weak, with minimal equity cushion and liquidity challenges.

3. Cash Flow Assessment:
   The negative working capital position signals tight liquidity. With only one employee (the director) and no audit requirement, the financial reporting is minimal. The accounts do not provide cash flow statements, but the increasing current liabilities and decreasing net assets imply cash outflows exceeding inflows in the period. The company’s ability to generate cash from operations or secure short-term funding is critical. Without improvement in receivables collection, payable management, or cash reserves, the company could struggle to meet debt repayments or supplier terms.

4. Monitoring Points:

• Working capital trends: monthly monitoring of current assets vs current liabilities.
• Cash flow forecasts: updates on operational cash generation and liquidity.
• Profitability: watch for return to positive reserves to rebuild net assets.
• Director’s financial support: any loans or equity injections by Mr. McGarry.
• Timely filing of future accounts and confirmation statements to avoid regulatory risk.