Company Number: 13383689

Analysis Date: 2025-07-29 18:59 UTC

1. Risk Rating: HIGH
   AFH Developments Ltd exhibits significant solvency concerns due to persistent negative net assets and net current liabilities, indicating it is currently unable to meet its short-term obligations without external support.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Funds: The company has reported net liabilities of approximately £2,697 as of 31 December 2023, a slight deterioration from previous years, signaling ongoing accumulated losses or insufficient equity.
• Negative Net Current Assets: A consistent working capital deficit around £32,000 reflects liquidity risk, with current liabilities exceeding current assets, mainly due to creditors and bank loans.
• High Long-term Debt Relative to Assets: The company carries bank loans of £82,458 due in more than one year, which is significant relative to total assets, increasing financial leverage and risk of default.

3. Positive Indicators:

• Stable Investment Property Asset: The company holds fixed assets in the form of investment property valued at £112,047 with no depreciation or impairment recorded, which provides a tangible asset base.
• Cash Reserves: Although modest, the company maintains cash balances around £40,000, which may provide short-term liquidity relief.
• No Overdue Filings: The company is in good regulatory standing with up-to-date accounts and confirmation statements, indicating compliance with filing requirements and governance norms.

4. Due Diligence Notes:

• Investigate the terms and covenants of the bank loans totaling £82,458, including repayment schedules and interest obligations.
• Review any off-balance-sheet liabilities or contingent liabilities not reflected in the filings.
• Examine the valuation method and market conditions for the investment property to assess the reliability and liquidity of this asset.
• Assess the company’s operational cash flows and revenue generation capability, which is not disclosed in the filed accounts due to exemption from full accounts submission.
• Clarify the nature of creditors within current liabilities as they are substantial relative to current assets.