Company Number: 13103618

Analysis Date: 2025-07-19 12:26 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   C&D Quality Homes Ltd shows an improving net asset position in 2024 with positive shareholders’ funds of £78,958 after recovering from a significant negative net asset position in 2023. However, the company exhibits tight liquidity with negative net current assets of £21,082 in 2024, indicating potential short-term cash flow pressures. The business operates in construction and real estate letting sectors, which can be cyclical and sensitive to economic downturns. The directors have maintained compliance with filing deadlines, and the company employs a small workforce of three, suggesting a manageable operational scale. Credit approval is recommended with close monitoring of liquidity and working capital to ensure timely debt service.

2. Financial Strength:
   The balance sheet shows a notable increase in fixed assets from £80,000 in 2023 to £380,000 in 2024, indicating asset growth possibly through property acquisitions or capital investments. Total net assets improved substantially from a negative £322,186 in 2023 to a positive £78,958 in 2024. However, high long-term creditors of £279,960 remain, which may reflect outstanding loans or finance agreements secured against fixed assets. The equity base is modest but positive, reflecting shareholder recovery. The company’s micro-entity status suggests limited scale, but the balance sheet trajectory is improving. The negative net current assets in 2024 flag liquidity risk despite the overall positive net assets.

3. Cash Flow Assessment:
   Current assets are reported as zero in 2024, with only prepayments and accrued income of £16,540, while current liabilities exceed this level, resulting in negative net current assets. This suggests working capital constraints and potential difficulties in meeting short-term obligations without additional cash inflows or refinancing. The reduction in current assets from £300,000 in 2023 to nil in 2024 is a concern, possibly due to asset reclassification or cash depletion. The company’s ability to generate operational cash flow from construction and letting activities requires verification, as limited liquid assets may impair debt servicing capability in the short term.

4. Monitoring Points:

• Liquidity ratios and net current asset position should be closely tracked quarterly to detect cash flow stress early.
• Monitor creditor aging and terms of long-term debt (£279,960) for covenant compliance and refinancing risk.
• Review operational cash flow generation from construction and real estate activities to confirm ongoing debt service capability.
• Watch for any director changes or adverse events that may impact governance or financial controls.
• Keep an eye on economic conditions in the real estate and construction sectors, as downturns could impact revenue and asset values.