28 E-SOLUTIONS LTD

Credit Opinion: CONDITIONAL

28 E-Solutions Ltd is an active, recently incorporated private limited company (incorporated June 2022) engaged in the repair of computers and peripheral equipment. Filings at Companies House are up to date and not overdue. The balance sheet shows improved net assets and a higher cash balance year on year. However, the accounts are unaudited, the company has not filed a profit and loss account, and liquidity is thin and heavily dependent on stock funded by trade creditors. Material related party balances are also present.

On this evidence, a facility could be considered only on conditions such as: recent management accounts including a profit and loss account; aged debtor and creditor listings; limits or repayment of related party balances; and, depending on facility size, security or a personal guarantee.

Financial Strength

• Net assets: £184,418 at 31 October 2025, up from £64,138 at 31 October 2024. Equity consists of £1 share capital and £184,417 retained earnings, indicating a very thin subscribed capital base.
• Fixed assets: £37,080, mainly motor vehicles acquired during the year (additions of £40,789 less depreciation).
• Current assets: £1,076,880, of which stock is £816,342 (approximately 76% of current assets). Stock increased by £52,755 during the year.
• Creditors due within one year: £870,142, of which trade creditors are £754,263. The balance sheet therefore relies heavily on supplier credit to fund inventory.
• Creditors due after more than one year: £59,400.
• Net current assets: £206,738, up from £123,326.
• The balance sheet shows a corporation tax liability of £41,705 (2024: nil), which suggests taxable profits may have been generated, but this cannot be verified because no profit and loss account has been filed.
• The accounts state that the director considers the company to be a going concern with sufficient working capital for at least 12 months. This is a management assertion in the filed accounts, not independent verification.

The immediate and ultimate parent undertaking is 28 Holdings Limited, incorporated in England and Wales. The ultimate controlling party is stated in the accounts to be the director by virtue of majority shareholding in the parent.

Cash Flow Assessment

• Cash at bank and in hand: £70,554 at 31 October 2025, up from £14,046 in the prior year.
• Working capital (net current assets): £206,738, up from £123,326.
• Current ratio: approximately 1.24:1 (current assets £1,076,880 divided by current liabilities £870,142).
• Quick ratio: approximately 0.30:1 (cash plus debtors of £260,538 divided by current liabilities £870,142). This indicates limited immediate liquidity and high dependence on converting stock into cash to meet short-term obligations.
• No cash flow statement is filed, so repayment capacity from operating cash generation cannot be assessed from the public accounts.
• Trade creditors of £754,263 are the largest liability. Any tightening of supplier payment terms could pressure liquidity quickly given the low ratio of liquid assets to current liabilities.
• Future minimum operating lease payments are modest at £5,388 per year.

Monitoring Points

• Obtain quarterly management accounts, including a profit and loss account, aged debtor and aged creditor listings, to verify trading performance and cash generation.
• Monitor stock levels and stock turnover; the £816,342 inventory balance is large relative to the balance sheet and carries obsolescence risk in a computer repair business.
• Track trade creditor balances and any signs of supplier pressure or lengthening payment terms.
• Monitor related party balances, including £41,600 due from a company controlled by close family members of the director, £47,078 due from a company with a common director, £8,651 owed to the director, and £32,000 owed to a close family member of the director.
• Watch the cash balance trend against any agreed facility headroom.
• Confirm continued timely filing of accounts and confirmation statements at Companies House.