NXGEN ENGINEERING LIMITED

Executive Summary

NXGEN Engineering Limited is a micro-sized engineering firm with a fragile financial position marked by negative net assets and worsening working capital. Liquidity risk is elevated due to increased current liabilities surpassing current assets. Conditional credit approval is suggested with strict monitoring of cash flow, capital adequacy, and compliance to mitigate risk exposure.

NXGEN ENGINEERING LIMITED - Analysis Report

Company Number: 13439024

Analysis Date: 2025-07-20 17:16 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   NXGEN Engineering Limited is a very small, micro-entity operating in the engineering sector. Their latest accounts show a marginally negative net asset position (£682 deficit) and a sharp deterioration in net current assets, which have fallen from a positive £2,386 in 2022 to a negative £9,383 in 2023. This raises concerns about liquidity and short-term solvency. However, the company remains active, has no overdue filings, and employs a small stable workforce of three. Given the limited financial history (incorporated 2021) and micro size, lending or credit extension could be considered but only with strict monitoring and possibly secured or limited exposure to mitigate risk.

2. Financial Strength:
   The balance sheet reflects a fragile financial position. Fixed assets increased modestly to £9,451 in 2023 from £513 the prior year, which may indicate some capital investment or asset acquisition. Current liabilities have doubled from £15,919 to £31,064, while current assets have not kept pace, resulting in a net current liabilities position. The total net assets have deteriorated from a positive £2,149 in 2022 to a small negative £682 in 2023. Shareholders’ funds are negative, suggesting accumulated losses or withdrawals exceeding equity. The company has a very low share capital of £100, limiting its financial buffer.

3. Cash Flow Assessment:
   The sharp increase in current liabilities combined with relatively stagnant current assets points to potential liquidity constraints. Negative net current assets highlight working capital challenges, which could impair the company’s ability to meet short-term obligations without additional financing or cash injection. The absence of an audit and profit & loss details limits insight into operating cash flow, but the data suggests tight liquidity. Operating lease commitments of £19,000 add to fixed cash outflows. Overall, cash flow risk is elevated and should be carefully evaluated before extending credit.

4. Monitoring Points:

• Quarterly review of cash flow and working capital to detect early signs of liquidity stress
• Watch for further deterioration in net assets and current ratio
• Directors’ actions to improve capital structure or secure additional funding
• Timely filing of statutory accounts and confirmation statements to ensure compliance
• Market conditions in the engineering sector and company’s ability to secure contracts or sales growth