Company Number: 12998749

Analysis Date: 2025-07-20 13:40 UTC

1. Credit Opinion: APPROVE with conditions
   Imperial Electrical Services Limited displays a stable financial position with positive net assets and working capital. The company is relatively young (incorporated in 2020) but has shown consistent net asset growth from £2,436 in 2020 to £9,533 in 2023. Current liabilities have increased but remain well covered by current assets, indicating short-term obligations are manageable. However, trade creditors and corporation tax liabilities have increased, which should be monitored. Given limited size and modest fixed assets, the company’s ability to service significant new debt may be constrained; therefore, approval should be conditional on maintaining positive cash flow and timely tax payments.

2. Financial Strength:
   The balance sheet reflects a small but improving equity base with shareholders’ funds increasing from £2,336 to £9,533 over four years, indicating retained earnings growth and profitability. Fixed assets are minimal (£600) and depreciating steadily, which aligns with the company’s classification as a micro/small enterprise. The company carries a small director loan liability reduced significantly from £4,504 in 2022 to £313 in 2023, reducing related party risk. Overall, the financial strength is adequate for current operations but limited in scale, with no indication of large asset-backed collateral.

3. Cash Flow Assessment:
   Cash balances remain stable at around £15,000, and net current assets stand at £9,246, showing sufficient liquidity to cover short-term liabilities of £18,111. Trade debtors (~£12,400) are slightly down from the previous year but remain high relative to cash, suggesting some reliance on receivables collection for liquidity. The increase in trade creditors to £11,726 may indicate extended payment terms or cash flow management tactics. The company appears to manage working capital prudently but should maintain focus on debtor collection and creditor payment schedules to avoid liquidity strain.

4. Monitoring Points:

• Watch corporation tax liabilities closely as they remain significant and fluctuate yearly.
• Monitor trade debtor aging and collection efficiency to ensure liquidity.
• Track the trend in trade creditors to ensure it does not signal payment delays that could harm supplier relationships.
• Review impact of any new credit facilities on cash flow and net assets to avoid overleveraging.
• Keep an eye on profitability and retained earnings growth to support equity base expansion.