RP ENGINEERING LTD

Executive Summary

RP Engineering Ltd is a small but financially stable engineering business with positive net assets and liquidity, showing growth in retained earnings over its first two years. The company’s clean compliance record and adequate working capital support a low-risk credit profile. Approval is recommended with prudent credit limits and ongoing monitoring of profitability and cash flow metrics.

RP ENGINEERING LTD - Analysis Report

Company Number: 14501456

Analysis Date: 2025-07-29 13:03 UTC

1. Credit Opinion: APPROVE
   RP Engineering Ltd is a newly incorporated private limited company (Nov 2022) classified as a small entity, with no overdue filings and a positive net asset position. The company demonstrates modest but improving financial strength with net assets increasing from £14.2k to £18.4k in one year. Directors have no disqualifications and appear to maintain good governance. While limited historical data is available due to the company's youth, current financials indicate adequate liquidity and working capital to meet short-term obligations. The engineering sector SIC code (71129) implies technical activity with potential for steady demand. Credit risk is low to moderate given the small scale and early stage, but approval is justified for lending within conservative limits.

2. Financial Strength
   The balance sheet shows total assets less current liabilities of £18,373 at the latest year end (30/11/2024), up from £14,249 the prior year. Tangible fixed assets are minimal (£1,032) with the majority held in cash (£27,855). Current liabilities are low (£10,514), mainly comprising taxation and social security (£7,562) and other creditors (£2,951). The company has positive net current assets of £17,341, indicating a healthy short-term liquidity buffer. Shareholders’ funds consist mostly of retained earnings (£18,273) with nominal share capital (£100), reflecting accumulated profits retained in the business. The balance sheet composition is conservative and supports financial stability.

3. Cash Flow Assessment
   Cash balances have improved slightly from £24,050 to £27,855 year-on-year, enhancing liquidity. The stable and manageable current liabilities allow the company to maintain a net working capital surplus of £17,341. The increase in retained earnings suggests the company is generating profits, although income statement details are not disclosed. The small workforce (2 employees) and controlled overheads likely contribute to positive cash flow management. Overall, liquidity appears sufficient to service operational needs and moderate credit facilities.

4. Monitoring Points

• Track turnover and profitability once income statements are available to confirm ongoing earnings quality.
• Monitor cash flow trends relative to current liabilities to ensure working capital remains positive.
• Watch for any delayed filings or changes in director status that might indicate governance issues.
• Assess impact of any industry-specific risks or economic downturns on engineering activity and receivables.
• Review any new debt or credit facility usage to avoid over-leverage given small equity base.