SOIL REENGINEERING SERVICES LTD

Executive Summary

Soil Reengineering Services Ltd exhibits modest financial strength with improving equity but faces liquidity challenges due to a substantial working capital deficit. Credit approval is recommended on a conditional basis, requiring ongoing monitoring of cash flow and working capital management. The company’s young age and small scale warrant careful scrutiny of operational cash generation before extending significant credit.

SOIL REENGINEERING SERVICES LTD - Analysis Report

Company Number: 14168921

Analysis Date: 2025-07-29 20:16 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Soil Reengineering Services Ltd is a micro private limited company active since June 2022. While the company shows positive net assets (£19,878 as of June 2024) and growth in equity from prior years, its working capital position has deteriorated significantly in the latest year, with net current liabilities of £17,863 versus net current assets of £9,467 the previous year. This indicates potential short-term liquidity stress. Given the company’s young age, limited trading history, and small scale (only 2 employees), credit approval should be conditional on close monitoring of liquidity and confirmation of stable cash inflows or access to funding sources to cover short-term obligations.

2. Financial Strength:
   The balance sheet shows a modest but improving equity base, increasing from £11,107 in 2023 to £19,878 in 2024, supported by a rise in fixed assets from £1,640 to £37,741. However, current liabilities have increased sharply from £6,248 to £28,202, while current assets decreased from £15,715 to £10,339. This shift results in a working capital deficit, which weakens the financial cushion against operational risks. The company has no audit exemption risks and complies with micro-entity reporting standards, but lack of profit and loss detail limits insight into profitability and cash generation.

3. Cash Flow Assessment:
   The negative net current assets position signals potential cash flow constraints, as current liabilities exceed current assets by a significant margin. The company’s small size and limited employee base suggest cash flows may be volatile or dependent on few contracts. The absence of detailed profit and loss information restricts assessment of operating cash flows, but the working capital deterioration is a warning sign. Management should demonstrate ability to manage payables and receivables effectively and maintain liquidity to meet short-term debts.

4. Monitoring Points:

• Quarterly cash flow statements to track liquidity trends.
• Receivables and payables aging reports to assess working capital management.
• Progress on fixed asset utilization and whether asset investments are translating into revenue growth.
• Timely completion of next accounts and confirmation statements to ensure compliance.
• Any changes in director or PSC status that may indicate governance shifts.