DANG INVESTMENT LTD

Executive Summary

Dang Investment Ltd shows elevated financial risk driven by negative equity, increasing related party debt, and deteriorating liquidity. While asset growth and regulatory compliance are positive, the company’s solvency and cash flow position warrant close scrutiny. Further due diligence on loan terms, asset valuations, and operational cash flow stability is recommended before considering investment.

DANG INVESTMENT LTD - Analysis Report

Company Number: 13611792

Analysis Date: 2025-07-29 14:04 UTC

1. Risk Rating: HIGH
   Dang Investment Ltd exhibits a high risk profile primarily due to its substantial negative net assets position, significant long-term liabilities, and net current liabilities in the latest financial year. These factors indicate potential solvency and liquidity challenges.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Funds: The company’s net assets declined from -£44,259 in 2023 to -£96,662 in 2024, indicating accumulated losses and erosion of equity, which raises solvency concerns.
• High Long-Term Related Party Debt: Amounts owed to related parties increased markedly from £432,878 to £619,765, representing a large liability that may strain financial flexibility, especially since it is repayable over 30 years but still a significant obligation.
• Net Current Liabilities: The company reported net current liabilities of £3,897 in 2024 compared to net current assets previously, reflecting potential short-term liquidity constraints. Cash balances also dropped substantially from £32,586 to £9,163, increasing risk of operational cash flow issues.

3. Positive Indicators:

• Tangible Fixed Assets Growth: The company’s investment properties increased in value from £371,976 to £527,000, which may provide asset backing for liabilities and potential future income streams.
• No Overdue Filings: Accounts and confirmation statements are up to date with no overdue filings, indicating compliance with regulatory requirements.
• Directors Support: Related party loans from directors and associated companies are interest-free or low interest and repayable over long terms, which may provide some financial support and flexibility.

4. Due Diligence Notes:

• Verify the nature and enforceability of related party loans and the likelihood of repayment terms being adhered to, including any covenants or conditions.
• Assess the valuation methodology and reliability for the investment properties, as these constitute the majority of fixed assets and underpin the company’s asset base.
• Review cash flow forecasts and working capital management to evaluate if the company can meet short-term obligations given negative net current assets and declining cash reserves.
• Investigate the reasons for the significant increase in liabilities and the cause of accumulated losses leading to negative equity, including any operational or market challenges.
• Confirm no director disqualifications or governance issues exist beyond the available data.