GKH ENGINEERING LIMITED

Executive Summary

GKH Engineering Limited demonstrates financial stability with positive net assets and working capital despite low cash reserves. The company’s creditworthiness is acceptable for approval with conditions focused on monitoring debtor collections and liquidity management. Continued oversight is essential due to the company’s young age and reliance on a single director for operational control.

GKH ENGINEERING LIMITED - Analysis Report

Company Number: NI691281

Analysis Date: 2025-07-29 13:33 UTC

1. Credit Opinion: APPROVE with conditions.
   GKH Engineering Limited is a recently incorporated private limited company operating in plumbing, heating, and air-conditioning installation. The company shows a stable financial position with positive net assets and working capital. However, given the company’s young age (incorporated in 2022) and small scale (single employee director), credit approval should be conditional on continued monitoring of cash flow and debtor collections to ensure ongoing liquidity and repayment capacity.

2. Financial Strength:
   The balance sheet as of 31 March 2025 shows net assets of £8,889, slightly decreased from £9,012 the previous year. Fixed assets are minor (£714), reflecting low capital intensity, typical for service trades. The company holds adequate net current assets (£8,175) supported by increasing trade debtors (£10,435) but low cash balances (£880). Shareholders’ funds are essentially the retained earnings, indicating no external equity injections beyond initial £1 share capital.

3. Cash Flow Assessment:
   Cash on hand dropped significantly from £5,008 in 2024 to £880 in 2025, despite an increase in debtors. This suggests cash is tied up in receivables, which may impact liquidity if collections slow. Current liabilities rose to £3,140, mainly due to increased taxation and social security obligations (£1,965). The company must improve debtor management and maintain adequate cash reserves to meet short-term liabilities promptly.

4. Monitoring Points:

• Debtor ageing and collection periods to ensure cash inflows remain steady.
• Cash balance trends to prevent liquidity strain despite positive working capital.
• Taxation and social security liabilities to avoid accrual accumulation risking cash flow.
• Business growth and turnover development to assess credit capacity improvement.
• Director’s ability to manage operational and financial risks given sole control.