CHILANE DEVELOPMENTS LTD

Executive Summary

Chilane Developments Ltd displays concerning financial weakness with negative net assets and insufficient liquidity to cover short-term liabilities, indicating a high credit risk. The lack of detailed financial disclosures typical of micro-entities limits visibility into operational performance, but the current balance sheet position advises against credit approval. Close monitoring of future financial filings and management actions is recommended before reconsidering credit facilities.

CHILANE DEVELOPMENTS LTD - Analysis Report

Company Number: 13016104

Analysis Date: 2025-07-20 18:48 UTC

1. Credit Opinion: DECLINE
   Chilane Developments Ltd currently demonstrates negative net assets and shareholders' funds, indicating a balance sheet deficit that undermines its financial stability. The company, classified as a micro-entity in the domestic construction sector, shows no audit requirement, limiting transparency on profitability and cash flow generation. Current liabilities exceed current assets, resulting in negative working capital and weak liquidity, which raises concerns about its ability to meet short-term obligations. Without evidence of improving financial performance or strengthened capital, extending credit would expose the bank to elevated risk.

2. Financial Strength:
   The company’s net assets position deteriorated from -£2,720 in 2022 to -£5,265 in 2023, reflecting an erosion in equity and a balance sheet deficit. Current liabilities of £20,360 exceed current assets of £15,095, resulting in negative net current assets of £-5,265. The share capital is nominal (£100), providing minimal buffer against losses. The company employs 4 people, consistent with a micro-entity, but lacks fixed assets disclosures, which limits assessment of asset backing. Overall, the financial structure is weak with no retained earnings or reserves to absorb shocks.

3. Cash Flow Assessment:
   The negative working capital position signals cash flow constraints, as current liabilities surpass readily available current assets. The absence of detailed profit and loss or cash flow statements (exempt due to micro-entity reporting) restricts insight into operating cash generation or financing activities. However, the persistent deficit and increasing liabilities suggest the company may struggle to generate sufficient cash inflows to service debts or fund operations without external support.

4. Monitoring Points:

• Monitor subsequent annual accounts for any reversal in net asset deficit or improvement in working capital.
• Watch for timely filing of accounts and confirmation statements to ensure regulatory compliance.
• Track any changes in director or shareholder control that might inject capital or restructure liabilities.
• Observe industry conditions in the domestic construction sector, which can impact revenue stability.
• Request interim financial updates to assess liquidity and profitability trends between filings.