Company Number: 14074965

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

1. Credit Opinion: CONDITIONAL APPROVAL
   Green Ohms Electrical Services Ltd shows a solid operational base in electrical installation with tangible fixed assets growth and positive net current assets. However, the company is relatively young (incorporated 2022) with limited financial history. The presence of finance lease obligations and director loans requires monitoring. The reduction in net assets from £16,969 in 2023 to £12,182 in 2024 alongside increased long-term liabilities suggests some cash flow or investment strain. Credit facilities can be approved conditionally, provided the company demonstrates improving profitability and maintains timely payments on lease and loan obligations.

2. Financial Strength:
   The company’s net assets stand at £12,182 as of 31 December 2024, down from £16,969 in the previous year. Fixed assets have increased significantly due to motor vehicle acquisitions (£22,268 net book value), indicating investment in operational capacity. Current assets of £25,538 cover current liabilities of £15,846 comfortably, giving positive working capital of £9,692. However, the addition of £19,778 in finance lease obligations (long-term liabilities) increases total liabilities, reducing overall equity and financial flexibility. Shareholders’ funds remain positive, but the decline signals some erosion of retained earnings or increased debt servicing costs.

3. Cash Flow Assessment:
   Cash at bank (£11,325) and trade debtors (£9,359) provide liquidity to meet short-term obligations. Net current assets are positive, indicating healthy short-term liquidity. The company has reduced bank overdrafts to zero in 2024, improving cash flow stability. However, trade debtors have decreased significantly (from £25,125 to £14,213), which could indicate slower sales or tighter credit terms with customers. Director loans have decreased but still contribute to current liabilities. The finance lease obligations require regular outflow and represent a fixed charge on future cash flows. The company should ensure consistent cash inflows to cover these commitments.

4. Monitoring Points:

• Profitability trends and retention of earnings to rebuild net asset base
• Management of trade debtor days and collection efficiency
• Servicing of finance lease obligations and director loans without impacting liquidity
• Growth in fixed assets versus return on investment
• Maintaining positive working capital and avoiding overdraft reliance
• Directors’ adherence to prudent financial stewardship and transparency in reporting