SJS UTILITIES LTD
Executive Summary
SJS Utilities Ltd is a newly incorporated micro company with a modest positive net asset position but declining equity. Its financial resources and working capital are limited, restricting its capacity to support significant credit. Conditional credit facilities may be considered with prudent limits and ongoing monitoring due to the small scale and early stage of the business.
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This analysis is opinion only and should not be interpreted as financial advice.
SJS UTILITIES LTD - Analysis Report
Credit Opinion: CONDITIONAL APPROVAL
SJS Utilities Ltd is a micro-entity with limited financial history, being incorporated recently in mid-2022. The company shows positive net current assets and net assets, indicating a modest but positive working capital position. However, net assets have declined from £3,766 in 2023 to £1,339 in 2024, signaling some erosion of equity. The company’s size, limited turnover data, and low asset base suggest limited capacity to absorb financial shocks or service significant debt. Credit approval can be granted conditionally for small facilities with regular monitoring, but larger credit lines would not be advisable at this stage without further financial evidence or guarantees.Financial Strength:
The company’s balance sheet is very lean with current assets of £9,214 and current liabilities of £7,875 at the last reporting date, leaving net current assets of £1,339. There are no fixed assets reported, implying no tangible collateral. Shareholders' funds have decreased by approximately 64% compared to the previous year, which could reflect operational losses or distributions but specific profit/loss data is not provided. The company’s micro classification and minimal equity base limit its financial robustness.Cash Flow Assessment:
With net current assets positive but modest, liquidity appears sufficient to meet short-term liabilities, but the narrow margin leaves little buffer for unexpected expenses or delays in receivables. The accounts mention director loans that are unsecured and repayable on demand, which could provide some informal liquidity support. However, the limited cash and working capital base suggest cash flow management will be critical and potentially vulnerable.Monitoring Points:
- Track subsequent annual accounts to confirm if the decline in net assets continues or stabilizes.
- Monitor cash flow statements or management accounts if available to assess operational cash generation.
- Watch for any director loans or related party transactions that may impact liquidity or financial structure.
- Review any changes in credit terms or payment performance with suppliers and creditors.
- Confirm continued compliance with filing deadlines and absence of adverse director conduct or legal issues.
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