NE POWER SOLUTIONS LTD

Executive Summary

NE Power Solutions Ltd is an early-stage electrical installation business with a modest positive working capital position but limited trading history. The company’s financials reflect typical start-up characteristics with tight liquidity and reliance on related party funding. Credit approval is recommended on a conditional basis, subject to ongoing review of management accounts and cash flow to ensure debt servicing capability.

NE POWER SOLUTIONS LTD - Analysis Report

Company Number: NI706071

Analysis Date: 2025-07-20 16:16 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   NE Power Solutions Ltd is a very young company, incorporated in December 2023, with its first abbreviated accounts filed for a 7-month period ending July 2024. The company shows modest positive net current assets (£8,166) and shareholders' funds, but liabilities due within one year are substantial relative to current assets (£124,575 creditors vs. £132,741 current assets). The company’s ability to service debt currently appears adequate but limited. The directors have not provided a profit and loss account, so profitability and cash generation cannot be fully assessed. Given the company’s infancy and limited trading history, credit approval should be conditional on obtaining management accounts and cash flow forecasts demonstrating the ability to meet current and future obligations.

2. Financial Strength:
   The balance sheet shows total current assets of £132,741, including £72,115 in work in progress stock, £36,237 debtors, and £24,389 in cash. Current liabilities total £124,575, with trade creditors and amounts owed to connected parties forming the bulk. Net current assets stand at £8,166, and shareholders’ funds match this figure, reflecting no external long-term financing or reserves. The company is operating at a small scale with one employee (a director). The high level of creditors compared to cash suggests tight liquidity. No fixed assets or long-term assets appear on the balance sheet, limiting collateral value. Overall, the financial position is fragile but not unusual for a start-up in its first period.

3. Cash Flow Assessment:
   Cash on hand is £24,389, which provides some liquidity buffer. However, with current liabilities almost equal to current assets and a significant component of stock (work in progress) that may not be readily convertible to cash, working capital management will be critical. Trade debtors of £36,237 are moderate but timely collection is essential to maintain liquidity. The connected party creditor balance (£35,181) could indicate reliance on related entities for short-term funding, which may pose a risk if internal funding is withdrawn. The absence of a profit and loss statement means cash flow from operations is unknown, requiring further monitoring through management accounts.

4. Monitoring Points:

• Regular monitoring of cash flow and liquidity, with focus on debtor collection and stock turnover.
• Review of updated management accounts and cash flow forecasts to confirm ongoing ability to meet liabilities.
• Watch for any increase in creditor balances, especially related parties, which could signal cash flow stress.
• Management’s ability to grow turnover and achieve profitability to strengthen equity and reduce reliance on short-term credit.
• Confirmation that new director appointed in March 2024 (Una Greene) adds operational and financial management expertise.