ON GRADE EARTHWORKS AND STABILISATION LTD

Executive Summary

ON GRADE EARTHWORKS AND STABILISATION LTD is a start-up construction and engineering business with a weak financial position evidenced by net liabilities and a working capital deficit in its first year. Limited liquidity and lack of profitability raise concerns about its ability to service debt. Credit approval is not recommended at this time without significant improvement in financial metrics or capital support.

ON GRADE EARTHWORKS AND STABILISATION LTD - Analysis Report

Company Number: 14573749

Analysis Date: 2025-07-29 19:53 UTC

1. Credit Opinion: DECLINE
   ON GRADE EARTHWORKS AND STABILISATION LTD is a newly incorporated company (January 2023) with its first financial statements filed for the period ending January 2024. The accounts show net liabilities of £13,560, reflecting negative shareholders’ funds and working capital deficits. The company has no long-term assets and current liabilities exceed current assets by £13,560. This weak financial position and lack of operational track record present a high credit risk. Without evidence of profitability, cash flow generation, or capital injection plans, the company is currently unable to demonstrate an ability to service debt or meet commercial obligations reliably.

2. Financial Strength:
   The balance sheet reveals minimal fixed assets and total current assets of £73,367 consisting mainly of trade debtors (£56,345) and minimal cash (£585). Current liabilities stand at £86,927 dominated by other creditors (£77,059). The resulting net current liability position and total net liabilities of £13,560 illustrate an undercapitalised business in its start-up phase. The absence of retained earnings and negative profit and loss reserve confirm accumulated losses or initial losses related to business formation. The directors have acknowledged the going concern basis despite these deficits, but the financial strength is weak and reliant on future capital or improved trading results.

3. Cash Flow Assessment:
   Cash at bank is very low at £585, indicating limited liquidity. The high level of trade debtors relative to cash suggests potential delays in cash conversion. Creditors due within one year exceed current assets, which may pressure the company’s working capital cycle. The company employs five staff and has pension obligations, adding to fixed overheads. Overall, liquidity is constrained, and the company lacks a cash buffer to absorb operational shocks or delayed payments. The current cash flow position is inadequate to cover short-term liabilities comfortably.

4. Monitoring Points:

• Improvement in net working capital: Monitor reductions in current liabilities and increases in cash balances.
• Trade debtor collection efficiency: Watch for any evidence of bad debts or slow payments.
• Profitability trends in subsequent accounts: Assess ability to generate positive retained earnings.
• Capital injections or financing arrangements: Confirm if directors or investors provide additional funds to strengthen the balance sheet.
• Contract wins and revenue growth: Evaluate evidence of sustained sales and contract execution to support cash flow.