DC PROPERTY & ASSETS LTD

Executive Summary

DC Property & Assets Ltd demonstrates adequate short-term liquidity but suffers from negative equity and limited capital reserves, posing a risk to long-term solvency. Conditional credit approval is recommended with stringent monitoring of financial position and cash flows to mitigate potential distress. The company’s lean structure and real estate focus provide some operational resilience, but capital restoration is essential for creditworthiness.

DC PROPERTY & ASSETS LTD - Analysis Report

Company Number: 12446092

Analysis Date: 2025-07-20 12:05 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   DC Property & Assets Ltd is a micro private limited company operating in real estate letting. Despite negative net assets of £3,364 as of 29 February 2024, the company maintains positive net current assets of £37,584, indicating short-term liquidity adequacy. However, the persistent negative equity over the last two years signals accumulated losses or capital erosion, raising concerns about long-term solvency and capital buffer. The company has no employees and limited fixed assets, suggesting a lean operational structure. Given these factors, credit approval should be conditional on close monitoring of capital restoration and operating cash flows to ensure continued debt servicing capacity.

2. Financial Strength:
   The balance sheet shows current assets of £56,351 against current liabilities of £18,767, yielding net current assets (working capital) of £37,584, which is a healthy liquidity position for meeting short-term obligations. However, the company carries non-current liabilities exceeding £40,000, which, combined with net liabilities (negative shareholders' funds), indicates an undercapitalized position. The negative equity position has worsened from £1,803 in 2023 to £3,364 in 2024. The absence of fixed assets beyond current assets suggests limited collateral value for lending. Overall, the financial strength is weak due to negative net worth but offset somewhat by positive working capital.

3. Cash Flow Assessment:
   Positive net current assets demonstrate the company’s ability to cover immediate liabilities, indicating reasonable liquidity. The lack of employees and minimal operational scale suggest low overhead costs, which may assist cash conservation. However, no detailed cash flow statements are provided, so the assessment depends on working capital and creditor analysis. The company should maintain consistent inflows from letting income to service debts, especially the sizeable long-term liabilities. Without clear evidence of profit generation or cash inflows, cash flow risk remains moderate.

4. Monitoring Points:

• Track quarterly updates on net assets and working capital to detect any further erosion or improvement.
• Monitor status and servicing of non-current liabilities to avoid covenant breaches or defaults.
• Review incoming rental income or other operating cash flows to confirm debt coverage capability.
• Watch for any director changes or adverse filings that may signal operational difficulties.
• Ensure timely submission of annual accounts and confirmation statements to maintain compliance.