Company Number: 13842205

Analysis Date: 2025-07-19 12:22 UTC

1. Risk Rating: HIGH
   Heritage Electrical Automation Ltd exhibits significant solvency and liquidity concerns despite its micro-entity status and recent incorporation. The company’s net current liabilities remain substantially negative (£-10,430 as of 31 January 2024), and it has a large creditor balance falling due after more than one year (£34,200). The net assets have dramatically declined from £15,330 in 2023 to a marginal £1,272 in 2024, indicating deteriorating financial health.

2. Key Concerns:

• Negative Working Capital: Persistent net current liabilities suggest the company struggles to cover short-term obligations, raising liquidity risk.
• High Long-Term Creditors: The emergence of £34,200 creditors due after one year (absent in the prior year) signals increased debt burden and potential solvency pressure.
• Declining Net Assets: A sharp drop in net assets within one year indicates erosion of equity and potential risk to shareholder funds, possibly reflecting losses or increased liabilities.

3. Positive Indicators:

• No Overdue Filings: The company is current on both accounts and confirmation statement filings, indicating regulatory compliance and proper governance at a basic level.
• Director’s Professional Background: The sole director is a qualified electrical engineer, which aligns with the company’s electrical installation SIC code and may support operational stability.
• Micro-Entity Filing Status: Reduced reporting complexity and compliance burden may be advantageous for a small, early-stage company.

4. Due Diligence Notes:

• Investigate the composition and terms of the £34,200 long-term creditors to understand repayment obligations and covenant risks.
• Review cash flow statements (if available) or inquire about cash management practices to assess liquidity beyond balance sheet snapshots.
• Clarify the nature of director advances and the impact of director loans on company finances.
• Assess business model viability and contract pipeline, given the very small scale (2 employees) and low current assets.
• Confirm absence of any undisclosed contingent liabilities or legal issues.