GENERATE ELECTRICAL LTD

Executive Summary

GENERATE ELECTRICAL LTD currently exhibits a weak financial profile characterized by negative net assets and limited operational scale, resulting in a high credit risk. The company’s liquidity position is strained with liabilities exceeding assets and modest cash reserves, limiting its ability to service debt. Without clear signs of financial improvement or capital injection, credit facilities are not recommended at this stage.

GENERATE ELECTRICAL LTD - Analysis Report

Company Number: 14616033

Analysis Date: 2025-07-29 16:58 UTC

1. Credit Opinion: DECLINE – GENERATE ELECTRICAL LTD shows weak financial health with negative net assets and shareholder funds as of the latest accounts. The company reported net liabilities of £3,124 at 31 January 2025, a deterioration from a small positive net asset position in the prior year. Current liabilities exceed current assets, and there is significant long-term creditor exposure (£8,845) with no employees, which raises concerns about operational capacity and cash flow generation. The company is newly incorporated and has limited trading history, with no recorded profits or equity build-up. These factors indicate a high credit risk and limited capacity to service debt or withstand financial stress.

2. Financial Strength: The balance sheet reflects a fragile financial position with net liabilities of £3,124 and negative shareholder funds, indicating the company’s liabilities exceed its assets. Current assets decreased significantly from £9,957 in 2024 to £5,329 in 2025, largely due to a drop in debtors from £6,214 to £894, although cash increased slightly. Current liabilities remain high at £8,845, worsening the working capital deficit. There are no fixed assets recorded, and no employees, suggesting limited operational scale or investment. The company's capital structure is minimal with only £1 in called-up share capital and an accumulated loss reflected in the profit and loss account.

3. Cash Flow Assessment: Cash holdings are modest at £4,435 with debtors sharply reduced, which could indicate collection issues or lower sales. Current liabilities surpass current assets, leading to a negative net current asset position when considering all liabilities including long-term creditors. This indicates potential liquidity constraints and a risk that short-term obligations may not be covered by readily available assets. The absence of employees may reduce payroll costs but also suggests limited operational activity, which could impact cash inflows. Overall, cash flow appears insufficient to support further credit without clear evidence of improving trading performance.

4. Monitoring Points:

• Improvement or further deterioration in net assets and shareholder funds.
• Changes in debtor collection and creditor payment terms affecting working capital.
• Evidence of revenue growth or profitability in future accounts.
• Director’s plans to strengthen capital or operational capacity.
• Any changes in the company’s employee headcount or operational scale.
• Timely filing of accounts and confirmation statements.