POWER CMS TECHNOLOGY LTD

Executive Summary

Power CMS Technology Ltd is a newly incorporated micro-entity experiencing deteriorating financial health with negative net assets and working capital deficits. The company currently lacks sufficient financial strength to reliably service credit obligations, indicating a high credit risk. Close liquidity monitoring and further financial information are essential before considering credit approval.

POWER CMS TECHNOLOGY LTD - Analysis Report

Company Number: 14616221

Analysis Date: 2025-07-29 18:47 UTC

1. Credit Opinion: DECLINE
   Power CMS Technology Ltd exhibits a negative net asset position for the year ended 31 January 2025, showing net liabilities of £34,571, deteriorating significantly from a net asset position of £5,825 in the prior year. This indicates the company is currently insolvent on a balance sheet basis. The rapid increase in current liabilities relative to current assets points to potential liquidity strains. Despite being a micro-entity and in early stages of operation, the financial trend is unfavorable and suggests insufficient financial resources to reliably service debt or credit obligations at this time. Management has not provided audit assurance, limiting insight into the quality of financial controls.

2. Financial Strength:
   The balance sheet shows current assets of £13,891 against current liabilities of £48,462 as of 31 January 2025, resulting in net current liabilities of £34,571. This negative working capital position raises concerns about the company's ability to meet short-term obligations. Total net assets are negative £34,571, reflecting accumulated losses or overextension of liabilities. The company has no fixed assets disclosed, indicating limited tangible collateral. The increase in liabilities over the last year without a corresponding asset increase undermines financial stability.

3. Cash Flow Assessment:
   The micro-entity accounts do not provide a cash flow statement, but the negative net working capital and net liability position imply cash flow difficulties. The company’s liabilities due within one year exceed current assets by a considerable margin, suggesting potential challenges in maintaining sufficient liquidity. The increase in average employees from zero to three indicates some operational growth, but without clear cash inflows or profitability, working capital management may be stressed.

4. Monitoring Points:

• Monthly or quarterly monitoring of current liabilities and cash balances to detect liquidity stress early.
• Review of any upcoming credit facilities or loan covenants given the negative net asset position.
• Examination of operational cash flows and profitability trends in interim management accounts.
• Monitoring director conduct and any changes in ownership or control that may impact financial stewardship.
• Watch for overdue filings or signs of insolvency proceedings, given current financial weakness.