Company Number: 14489131

Analysis Date: 2025-07-29 12:33 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   UPS Solar Limited is a very young company (incorporated late 2022) showing rapid asset accumulation and growth in operations, which is positive. However, the company currently has a significant working capital deficit (£355k negative net current assets) due to current liabilities exceeding current assets, which implies liquidity stress risk in the short term. The company’s ability to service debt depends heavily on converting debtors and stock to cash quickly. Approval is conditional on monitoring liquidity closely and possibly requiring short-term liquidity support or guarantees.

2. Financial Strength:

• Total net assets stand at £129,844, reflecting initial equity and retained earnings, indicating some capital buffer.
• Fixed assets are substantial at £484,883, including goodwill (£382,500) and tangible assets (£102,383), suggesting investment in the business and acquired goodwill from prior operations or acquisitions.
• However, current liabilities are high (£1,026,100), mainly trade creditors and other creditors, causing a negative working capital position (£-355,039).
• The equity base is small relative to liabilities, which limits financial flexibility.
• No audit has been performed, but the accounts are prepared under small companies regime with FRS 102 compliance.

3. Cash Flow Assessment:

• Cash at bank is only £75,954, which is a small fraction of current liabilities and may be insufficient to cover immediate obligations.
• Trade debtors are £184,031 and stock £288,245, which will need to be converted to cash to improve liquidity.
• The company’s ability to manage payables and accelerate receivables will be critical to avoid cash flow bottlenecks.
• No profit and loss account was filed, limiting insight into operational cash flows or profitability.
• Given the short operating history, cash flow volatility risk remains elevated.

4. Monitoring Points:

• Track net current assets and liquidity ratios closely to ensure working capital improvement.
• Monitor debtor ageing and stock turnover to ensure timely cash conversion.
• Watch for any increase in current liabilities or delays in creditor payments.
• Review future filed accounts for evidence of profitability or further capital injections.
• Assess director’s ability to manage cash flow and implement controls to manage liquidity risk.