PURPLE ENGINEERING LTD

Executive Summary

Purple Engineering Ltd is a very small, early-stage engineering consultancy with minimal financial history but currently maintains positive net working capital and no external debt. Its credit risk is low for small, short-term facilities given clean filings and stable control. Caution is advised due to limited scale and cash buffer, recommending close liquidity monitoring and incremental credit exposure.

PURPLE ENGINEERING LTD - Analysis Report

Company Number: 14071063

Analysis Date: 2025-07-29 15:41 UTC

1. Credit Opinion: APPROVE with Caution. Purple Engineering Ltd is a very recently incorporated micro-entity (since 2022) with a modest net asset base (£868 at FY 2024 year-end) and no employees. The company's financials show a slight improvement in net current assets from £769 to £868 year-over-year, indicating a stable but minimal working capital buffer. Given the micro scale of operations, limited asset base, and no evidence of turnover or profitability data, the firm appears to be in an early stage with limited financial history. However, the company remains active, filings are up to date, and control is clearly consolidated under a single director with engineering expertise. The limited liabilities and current asset position suggest a low-risk credit exposure if facilities are kept small and short-term.

2. Financial Strength: The balance sheet shows total net assets of £868 at FY 2024, up from £769 in FY 2023, reflecting minor positive growth. Current assets (cash or equivalents) decreased from £3,997 to £2,107, while current liabilities fell more significantly from £3,228 to £1,239, improving net working capital. No fixed assets or long-term liabilities are reported. Shareholder funds equal net assets, indicating no external debt. The company operates with a very tight capital structure and minimal financial buffer, typical for a micro-entity startup phase.

3. Cash Flow Assessment: Current assets primarily consist of cash and receivables totaling £2,107, sufficient to cover current liabilities of £1,239, yielding a positive net current assets position of £868. This suggests the company has adequate short-term liquidity to meet immediate obligations without stress. No employees and presumably low operating overheads minimize cash burn risk. However, the decline in current assets from the previous year warrants monitoring to ensure ongoing cash inflows.

4. Monitoring Points:

• Track cash balances and current liabilities closely to ensure liquidity remains positive.
• Monitor turnover and profitability development to evaluate ability to service larger credit lines.
• Watch for any increase in liabilities or delay in account filings that could signal operational strain.
• Assess director’s business plan execution and any capital injections or external funding rounds.
• Monitor industry conditions for early-stage engineering consultancies and related sectors, which can be sensitive to economic cycles.