HA.ELECTRICS & IT LTD

Executive Summary

HA.ELECTRICS & IT LTD demonstrates weak financial health with negative net assets and poor liquidity, raising significant concerns regarding its ability to meet short-term obligations. The company is in its early stage, relying heavily on director financing, and lacks operational scale or profitability. Credit facilities at this stage are not recommended without substantial improvement in financial strength and cash flow.

HA.ELECTRICS & IT LTD - Analysis Report

Company Number: 14813386

Analysis Date: 2025-07-20 18:48 UTC

1. Credit Opinion: DECLINE. HA.ELECTRICS & IT LTD, incorporated in April 2023, is a very young company with limited operational history and financial data. The latest accounts show net liabilities and negative working capital, indicating that current liabilities exceed current assets by £6,729. The company’s cash position is minimal at £2,509, insufficient to cover short-term debts of £9,238, primarily owed to the director and accountancy fees. This weak liquidity position raises concerns about the company’s ability to meet its short-term obligations. The company also shows a negative equity position (-£787), reflecting accumulated losses or insufficient capitalization. The director is the sole significant controller, which concentrates risk on a single individual without evident financial strength or external support.

2. Financial Strength: The balance sheet reveals tangible fixed assets at £5,942 net of depreciation, but the company’s net current liabilities and negative shareholders’ funds indicate financial weakness. The director’s loan account of £8,638 forms the bulk of current liabilities, suggesting reliance on director financing rather than third-party funding. No employees are recorded, implying limited operational scale so far. The absence of profits and retained losses in the first financial year points to a startup phase with initial costs outweighing revenues. Overall, the company lacks sufficient financial buffers and capitalization to withstand adverse financial events.

3. Cash Flow Assessment: The company’s cash balance of £2,509 is insufficient against short-term liabilities of £9,238, producing negative net current assets of -£6,729. This indicates poor liquidity and potential cash flow stress. The company does not currently employ staff and may have low operating cash burn, but the director loan liability and outstanding creditors are immediate obligations. Without external financing or increased revenue generation, the company may struggle to maintain operations and repay debts on time. The accounts do not provide details of cash flow from operations, but the negative working capital signals ongoing liquidity risks.

4. Monitoring Points:

• Improvement in liquidity ratios, specifically current ratio (current assets/current liabilities) moving above 1.0.
• Reduction of director loan account or conversion into equity to strengthen balance sheet.
• Evidence of increasing turnover and positive operating cash flows in future accounts to demonstrate business viability.
• Timely payment of creditors and avoidance of overdue filings or penalties.
• Any changes in ownership or infusion of capital that bolster financial stability.
• The company’s ability to scale operations beyond a single director and maintain positive cash flow.