Company Number: 12585003

Analysis Date: 2025-07-29 14:16 UTC

1. Credit Opinion: APPROVE with caution
   NOVA ELECTRICAL WHOLESALE LTD demonstrates a positive but modest financial position typical of a micro-entity in its early years. The company has maintained a positive net asset base, improving from £2,131 in 2023 to £8,388 in 2024, showing growth in working capital. The limited share capital (£10) and micro size imply limited financial buffer. However, the company is current on filings and is not in liquidation or under stress. Given the small scale and stable incremental growth, credit facilities can be approved but should be modest and structured with regular monitoring.

2. Financial Strength:
   The balance sheet reflects a micro-entity with total net assets of £8,388 as of May 2024. Current assets increased significantly from £55,126 to £247,187, matched by a rise in current liabilities from £53,005 to £238,809, resulting in a net current asset position of £8,378. This indicates the company is maintaining a positive working capital position, though the margin is thin (~3.5% of current liabilities). The lack of fixed assets and minimal share capital indicate limited tangible collateral. Overall, the financial strength is adequate but vulnerable to sudden cash flow pressure.

3. Cash Flow Assessment:
   The company’s net current assets of £8,378 indicate a positive but narrow liquidity margin. The growth in current assets relative to liabilities suggests operational expansion or increased inventory/debtors, which could strain cash flow if not managed carefully. The company employs one staff member, which keeps fixed costs low. There is no indication of overdue payables or filing issues. Monitoring debtor collection and inventory turnover will be critical. Short-term liquidity appears managed but tight.

4. Monitoring Points:

• Maintain or improve net current assets to ensure liquidity buffer remains positive.
• Monitor current liabilities closely, especially any increases in trade creditors or short-term borrowings.
• Track debtor days and inventory turnover to prevent working capital strain.
• Watch for timely filing of accounts and confirmation statements to avoid compliance risks.
• Given the single director structure, assess governance and financial controls periodically.