Company Number: 14459326

Analysis Date: 2025-07-29 12:09 UTC

1. Credit Opinion: CONDITIONAL APPROVAL. SRL ELECTRICAL SOLUTIONS LIMITED is a recently incorporated micro-entity operating in electrical installation services. Although the company is active with up-to-date filings, the latest financials show a marked deterioration in working capital and net assets from £5,533 in 2023 to only £363 in 2024. This decline indicates tightening liquidity and potential cash flow pressures. The director holds full control, which simplifies decision-making but concentrates risk. Given the small size, limited financial history, and weakening balance sheet, credit exposure should be limited and subject to regular monitoring. Lending terms should include covenant triggers related to liquidity and timely financial updates.

2. Financial Strength: The company’s balance sheet is very modest, typical for a micro-entity with two employees. Current assets have decreased from £28,584 to £23,934, while current liabilities increased from £23,051 to £33,867, resulting in net current assets dropping from £5,533 to £363. Total net assets mirror this decline. The presence of prepayments and accrued income (£10,296) in 2024 suggests some revenue recognition timing effects but does not offset the overall tighter liquidity. The minimal equity base signals limited financial buffer against adverse events. No fixed assets are reported, indicating reliance on current operations for value.

3. Cash Flow Assessment: The shrinking net current assets and increased short-term liabilities highlight potential cash flow constraints. With current liabilities exceeding current assets by a small margin (net £363 positive), the company’s ability to meet short-term obligations is marginal. The small workforce and micro-entity status imply low operating overhead, which may help manage cash outflows. However, the negative trend requires caution, and the company’s cash flow cycle, receivables collection, and payment terms should be reviewed closely before extending credit.

4. Monitoring Points:

• Monthly liquidity position and working capital changes
• Timely submission of interim and annual financial statements
• Profitability trends and cash flow generation from operations
• Director’s ongoing commitment and any changes in ownership/control
• Payment history with suppliers and any adverse credit references
• Impact of any economic or sector-specific challenges on electrical installation demand