PAV AUTOMATION LTD

Executive Summary

PAV AUTOMATION LTD is a micro-entity with very limited financial resources and negative working capital, indicating liquidity risk despite positive net assets. The director’s personal funding provides some operational support, but the company’s ability to sustain debt repayments without additional capital is uncertain. Conditional credit approval is advised with strict monitoring of liquidity and financial performance.

PAV AUTOMATION LTD - Analysis Report

Company Number: 14369147

Analysis Date: 2025-07-29 13:32 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   PAV AUTOMATION LTD is a recently incorporated micro-entity (2022) operating in niche engineering and software development sectors. The company shows positive but very limited net assets (£288 as of 2024) and marginal improvement from prior years. Current liabilities slightly exceed current assets, indicating working capital pressure. The director has personally funded expenses and loans to the company, demonstrating some financial support. However, the thin equity base and negative net current assets expose the company to liquidity risk. Credit approval is recommended with conditions such as short-term credit limits, close monitoring of cash flows, and periodic financial updates.

2. Financial Strength:

• Fixed assets are minimal (£1,200), consistent with a service-based business model.
• Current assets grew from £15,619 (2023) to £22,566 (2024), but current liabilities also increased to £23,478, resulting in negative net current assets (-£912).
• Net assets remain positive but very low (£288), indicating the company is barely above insolvency threshold.
• Shareholder funds increased slightly, reflecting modest accumulated profits or capital injections.
• The director’s loans (£9,582) form a significant part of liabilities, which may be repayable on demand, adding to liquidity uncertainty.

3. Cash Flow Assessment:

• Negative working capital suggests potential liquidity constraints; however, the company has been able to fund operations partly through director loans and capital contributions.
• The increase in current assets is positive but insufficient to cover short-term liabilities fully.
• The lack of detailed profit and loss data limits full cash flow assessment; no audit or detailed P&L was filed due to micro-entity status.
• The company’s ability to generate cash internally remains unproven; external financing or director support appears necessary for ongoing operations.

4. Monitoring Points:

• Track quarterly cash flow statements and working capital trends to detect worsening liquidity.
• Monitor director loan balances and any repayments or additional funding.
• Observe timely filing of next accounts and confirmation statements to ensure compliance.
• Watch for any material changes in current liabilities or delayed payments to suppliers/creditors.
• Review any strategic developments in the engineering/software markets that could impact revenue growth.