5 DOUGHTY STREET LIMITED

Executive Summary

5 Doughty Street Limited exhibits significant liquidity and solvency weaknesses, with current liabilities greatly exceeding current assets and negative net assets. Despite substantial fixed assets secured by a bank loan, the company’s working capital deficit and reliance on director support undermine its ability to service short-term obligations. Credit approval is declined at this stage without additional risk mitigants or evidence of improved cash flow.

5 DOUGHTY STREET LIMITED - Analysis Report

Company Number: 13952624

Analysis Date: 2025-07-20 12:54 UTC

1. Credit Opinion: DECLINE. 5 Doughty Street Limited shows significant liquidity stress with current liabilities far exceeding current assets, resulting in a working capital deficit of approximately £3.37 million as of December 2023. The company’s net liabilities position and negative shareholders’ funds indicate that it is technically insolvent on a balance sheet basis. Although there are substantial fixed assets and a secured bank loan against property, the large short-term creditor exposure and negative net current assets suggest difficulty in meeting near-term obligations without additional support. The directors’ statement of going concern relies on continued support, which introduces risk. Given these factors, the company is not currently a reliable debtor without substantial mitigating factors such as proven cash flow improvement or external guarantees.

2. Financial Strength: The company holds tangible fixed assets valued at around £6.18 million, primarily land and buildings, which are encumbered by a fixed charge for a bank loan of £2.92 million due in more than one year. Total net liabilities stand at £106k, reflecting accumulated losses and negative retained earnings. The balance sheet shows a large mismatch between current assets (£73.8k) and current liabilities (£3.44 million), revealing a very weak liquidity position. The company is classified as a small private limited entity with 2 employees and is engaged in building project development. The controlling shareholder is a corporate entity owning 75-100% of shares, indicating concentrated ownership but limited external equity buffer.

3. Cash Flow Assessment: Cash at bank is low at £22,761, insufficient to cover immediate liabilities of over £3.4 million due within one year. Debtor balances have increased but remain modest at £51,051. The company relies heavily on long-term financing and director support to sustain operations. Negative working capital and reliance on bank loans secured against fixed assets imply constrained operational liquidity and potential cash flow timing issues. There is no income statement available to assess profitability or cash flow from operations, but the negative retained earnings and increasing creditor balances suggest ongoing cash flow challenges.

4. Monitoring Points:

• Monitor changes in working capital and current liabilities closely, as sustained deficits may trigger solvency concerns.
• Review updates on director support or external financing arrangements to understand funding sustainability.
• Track debtor collections and creditor payment terms to assess operational cash flow improvements.
• Watch for any changes in the status of the bank loan or enforcement of the fixed charge on the property.
• Monitor filing of future accounts for evidence of profitability or further deterioration.