POWERFUL DESIGNS LTD

Executive Summary

POWERFUL DESIGNS LTD demonstrates improving financial health with positive net working capital and modest shareholder funds, supporting a conditional credit approval. The company’s micro scale and limited trading history warrant cautious monitoring of liquidity and profitability metrics. Continued compliance with filing deadlines and operational cash flow management are critical for maintaining creditworthiness.

POWERFUL DESIGNS LTD - Analysis Report

Company Number: 14114240

Analysis Date: 2025-07-20 16:49 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   POWERFUL DESIGNS LTD is a very young micro-entity in the engineering consulting sector, showing initial signs of financial improvement. The company has moved from a net current liability position in 2022 and 2023 to a net current asset position in 2024, indicating better short-term liquidity. However, given its small scale, minimal fixed assets, and limited trading history (only two full years of accounts), the credit risk remains elevated. Approval is conditional on continued positive cash flow trends and timely filing of accounts and returns.

2. Financial Strength
   The balance sheet shows a modest but improving financial position:

• Fixed assets are negligible (£495 in 2024), reflecting low capital intensity.
• Current assets increased to £11,495 in 2024 from £7,373 in 2023, driven presumably by cash or receivables growth.
• Current liabilities rose modestly to £8,576 but remain covered by current assets, producing net working capital of £2,919.
• Shareholders’ funds increased from £1 in 2023 to £3,414 in 2024, indicating some retained earnings or capital injection.
  Overall, the financial strength is modest but improving, consistent with a micro-entity in early development.

3. Cash Flow Assessment
   The company’s shift to positive net current assets suggests improving liquidity and working capital management. However, the absolute cash balances and operating cash flow are not disclosed, which limits full assessment. The business has only one employee (the director), so fixed overheads are low, which supports cash conservation. Continued monitoring of cash inflows from operations and creditor payments is recommended to ensure ongoing ability to meet short-term obligations.

4. Monitoring Points

• Ensure continued positive net working capital and improvement in cash balances.
• Watch for timely filing of accounts and confirmation statements to avoid compliance risks.
• Monitor turnover and profitability trends in future accounts to confirm business viability and growth trajectory.
• Observe any changes in director or ownership structure, particularly given single-person control concentration.
• Assess impact of any external economic or sector-specific factors on business performance.