RIK WATSON MECHANICAL SERVICES LTD

Executive Summary

RIK WATSON MECHANICAL SERVICES LTD is a micro-entity showing modest but positive financial progression with a strengthening balance sheet and improved liquidity. The company demonstrates capability to meet short-term obligations, but given its small scale and early stage, credit exposure should be limited and monitored regularly. Continued growth and working capital management will be key to sustaining creditworthiness.

RIK WATSON MECHANICAL SERVICES LTD - Analysis Report

Company Number: 13446282

Analysis Date: 2025-07-29 19:41 UTC

1. Credit Opinion: APPROVE with caution.
   RIK WATSON MECHANICAL SERVICES LTD is a very small, micro-entity company with a limited asset base and minimal turnover information available. The company has demonstrated a positive growth in net assets from £1,119 in 2023 to £2,675 in 2024, indicating a modest strengthening of financial position. The absence of current liabilities in 2024 and increasing net current assets suggest an improving liquidity position. However, the company is in an early stage of its life cycle (incorporated 2021), with only one employee and limited financial scale, so exposure should be kept minimal and closely monitored.

2. Financial Strength:
   The balance sheet shows a net asset position of £2,675 as of 30 June 2024, up from £1,119 the previous year, indicating incremental growth in equity and financial stability. Current assets stand at £2,575 with no reported current liabilities in 2024, improving working capital compared to prior years. The share capital is nominal (£100), which is typical for micro-entities. The financial statements reflect compliance with micro-entity accounting standards, limiting detailed disclosures. Overall, the company’s financial strength is modest but improving, with no significant debt burden.

3. Cash Flow Assessment:
   Current assets primarily consist of cash, receivables, or short-term assets totaling £2,575, with no current liabilities reported in the latest accounts, resulting in positive net current assets. This suggests adequate short-term liquidity to meet immediate obligations. However, absolute cash balances are low relative to typical business operations, and the company employs only one person, indicating limited operational scale. The absence of detailed cash flow statements restricts a thorough cash flow analysis, but the positive working capital position is a favorable indicator for repayment capacity in the short term.

4. Monitoring Points:

• Track the company’s ability to increase turnover and profitability to build retained earnings and strengthen equity.
• Monitor working capital trends closely, ensuring current assets continue to exceed current liabilities.
• Watch for any significant changes in liabilities or debt levels that might stress liquidity.
• Evaluate the director’s continued engagement and any changes in management or control, given the company’s small size and reliance on a single director.
• Review subsequent annual accounts and confirmation statements for timely filing and any adverse changes in financial position or status.