SMF ELECTRICAL LTD

Executive Summary

SMF ELECTRICAL LTD is a recently incorporated micro-entity operating in electrical installation, with positive net assets and no overdue filings, reflecting regulatory compliance. However, its relatively high long-term liabilities and limited operational scale warrant further investigation to ensure ongoing solvency and liquidity. Overall, the company appears stable but should be monitored closely for financial and operational risks associated with its growth and financing structure.

SMF ELECTRICAL LTD - Analysis Report

Company Number: 14314775

Analysis Date: 2025-07-20 12:11 UTC

1. Risk Rating: LOW to MEDIUM
   SMF ELECTRICAL LTD demonstrates a stable net asset position with positive net current assets and no overdue filings. However, the presence of significant long-term creditors and limited scale (micro-entity with only one employee) introduces some caution regarding financial flexibility and operational scale.

2. Key Concerns:

• Long-term liabilities: The company reported £28,849 in creditors falling due after more than one year as of 2024, which is substantial relative to total net assets (£15,231). The nature and terms of these liabilities require clarification to assess solvency risk fully.
• Limited scale and resources: As a micro-entity with only one employee, operational resilience may be limited. This raises questions about capacity to manage growth, maintain service levels, or absorb shocks.
• Cash position decline: Current assets decreased from £19,954 in 2023 to £16,278 in 2024, while short-term creditors also declined but long-term creditors increased, indicating potential liquidity management issues over the period.

3. Positive Indicators:

• Positive net assets and working capital: The company holds net assets of £15,231 and positive net current assets of £9,445, indicating it can cover short-term liabilities.
• Timely compliance: Accounts and confirmation statements are up to date with no overdue filings, suggesting sound governance and regulatory compliance.
• Asset growth: Fixed assets increased significantly from £1,414 to £35,555, indicating investment in operational capacity or equipment, which could support business sustainability.

4. Due Diligence Notes:

• Investigate the composition and repayment terms of the long-term creditors (£28,849) to assess solvency risk and potential refinancing needs.
• Review cash flow statements (not provided) to evaluate liquidity trends and operational cash management.
• Understand the business model and client base given the small workforce and micro-entity status to assess operational sustainability and growth prospects.
• Confirm the reason for the significant increase in fixed assets and whether these are financed by long-term debt or equity.
• Verify any contingent liabilities or off-balance sheet commitments not disclosed in the micro-entity accounts.