HEAT-ENERGY ADVISORY (LONDON) LIMITED

Executive Summary

Heat-Energy Advisory (London) Limited displays a weak financial position with negative net assets and current liabilities exceeding current assets by over £60k. The company's liquidity is strained due to low cash and substantial short-term debts, raising serious concerns about its ability to meet obligations. Given these factors, credit extension is not recommended without substantial financial improvement or guarantees.

HEAT-ENERGY ADVISORY (LONDON) LIMITED - Analysis Report

Company Number: 12762506

Analysis Date: 2025-07-29 18:59 UTC

1. Credit Opinion: DECLINE
   Heat-Energy Advisory (London) Limited shows significant financial weakness and risk. The company reported net current liabilities of £62,910 and negative shareholders’ funds of £63,010 at the 2024 year end, indicating an insolvent balance sheet position. The company is classified as dormant for accounts filing purposes, yet it has accumulated substantial current liabilities with limited cash (£4,153) and high debtors (£86,700) that appear unlikely to cover short-term obligations promptly. The negative net assets and poor working capital position raise concerns over the company’s ability to meet its debt and trade commitments. Management turnover early in 2024 also suggests possible instability. Given these factors, the company currently lacks the financial strength and liquidity to support additional credit without significant mitigation or security.

2. Financial Strength:
   The company’s balance sheet is weak. Total current assets of £90,853 largely comprise debtors (£86,700) with minimal cash, while current liabilities amount to £153,763, including £58,675 in taxation and social security and £94,794 in other creditors. The resulting net current liabilities position of £62,910 and negative equity reflect accumulated losses and an inability to cover short-term debts from available assets. The absence of fixed assets and low share capital (£100) further limit capital adequacy. The company’s dormant filing status in prior years contrasts with its recent operating activity, which appears to have generated liabilities without sufficient asset backing. Overall, the financial structure is fragile and does not inspire confidence in solvency.

3. Cash Flow Assessment:
   Cash at hand is minimal (£4,153), and working capital is negative, indicating a liquidity shortfall. The large debtor balance may be collectible but presents a collection risk given the overall position. Current liabilities are dominated by tax and social security obligations and other creditors, likely requiring immediate settlement. The mismatch between cash inflows and outflows suggests strained operational cash flow, raising concerns over ongoing liquidity management. Without evidence of strong cash generation or external funding, the company faces a material risk of cash flow distress that could impede its ability to service debts or continue trading.

4. Monitoring Points:

• Watch for improvements in net current assets and reduction of creditor balances, especially tax liabilities.
• Monitor debtor collection performance to assess cash conversion.
• Track any additional capital injections or restructuring efforts to restore equity and liquidity.
• Review changes in management and business operations for signs of stabilization or further risk.
• Confirm timely filing of accounts and returns to ensure compliance and transparency.