CEDAR TREE PROJECT DEVELOPMENTS LTD

Executive Summary

Cedar Tree Project Developments Ltd shows active operations with asset growth but is under liquidity pressure due to rising current liabilities and low cash reserves. The fragile working capital position and declining net assets warrant cautious credit approval with conditions focused on improved cash flow management and monitoring. Close attention is required to debtor collections and short-term obligations to mitigate repayment risk.

CEDAR TREE PROJECT DEVELOPMENTS LTD - Analysis Report

Company Number: 13294489

Analysis Date: 2025-07-29 13:05 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Cedar Tree Project Developments Ltd is a small private limited company in building project development, with an active status and no overdue filings. However, the company exhibits significant liquidity constraints, reflected in persistent negative net current assets (£-43,463 in 2025) and a marginal net asset base (£803 in 2025, down from £2,988 in 2024). The increase in current liabilities, nearly doubling from £50,737 to £99,307 year-on-year, raises concerns about short-term repayment capability. While fixed assets have grown, this illiquidity and rising short-term obligations suggest a fragile financial position requiring close monitoring. Approval for credit facilities should be conditional upon receipt of further cash flow forecasts and confirmation of adequate working capital management.

2. Financial Strength:
   The balance sheet shows a steady increase in fixed assets (£27,707 in 2024 to £44,266 in 2025), indicating investment in plant and motor vehicles. However, the company’s current assets (£55,844) are insufficient to cover current liabilities (£99,307), resulting in a significant negative working capital position (-£43,463). Net assets have declined sharply, which signals erosion of equity and reduced financial buffer. Shareholder funds remain minimal (£802), reflecting limited equity injection or retained earnings. The company’s capital structure is weak, suggesting vulnerability in adverse market conditions or financial stress.

3. Cash Flow Assessment:
   Cash at bank is critically low (£1,044 as of 2025) compared to prior year (£22,218), indicating tightened liquidity. Despite £51,000 in debtors, the ability to convert these into cash timely is uncertain and must be verified. The negative net current assets show the company relies heavily on short-term financing or creditor funding to meet day-to-day obligations. Without strong cash inflows or improved receivables management, the risk of payment delays or default on liabilities is elevated. Working capital management improvement is essential for operational sustainability.

4. Monitoring Points:

• Track current liabilities and ensure they do not continue to escalate disproportionately to current assets.
• Monitor debtor collection periods to verify liquidity improvement.
• Review cash flow forecasts quarterly for early signs of stress.
• Assess impact of capital expenditures on liquidity and ability to service debt.
• Evaluate any changes in shareholder funding or external financing arrangements that could strengthen equity.
• Watch for any director or operational changes that may affect company management and credit risk.