DECENT ABODES LTD

Executive Summary

Decent Abodes Ltd demonstrates a high financial risk profile characterized by negative equity, substantial long-term debt, and limited liquidity. While the company remains compliant with filing requirements and holds investment property assets, the lack of independent valuation and significant working capital deficit raise concerns about its ability to meet obligations and sustain operations. Further due diligence on asset valuations, debt terms, and cash flow projections is recommended to fully assess solvency and operational viability.

DECENT ABODES LTD - Analysis Report

Company Number: 14123153

Analysis Date: 2025-07-29 12:40 UTC

1. Risk Rating: HIGH
   The company exhibits a high risk primarily due to its negative equity position and significant long-term borrowings that exceed its asset base. The inability to cover current liabilities with current assets further exacerbates solvency concerns.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Deficit: As of 31 May 2024, the company reports net liabilities of £54,978 and a shareholders’ funds deficit of £55,978, indicating the company’s liabilities exceed its total assets.
• Substantial Long-term Debt: The company has loans and borrowings of £300,163 due after more than one year, which is significantly higher than its total assets and may be difficult to service given the current financial structure.
• Minimal Liquidity and Working Capital Deficit: Current assets stand at only £105 against current liabilities of £2,019, resulting in a negative net current assets position of £1,914, suggesting potential cash flow challenges to meet short-term obligations.

3. Positive Indicators:

• Active Status and Compliance: The company is active, up to date with statutory filings (accounts and confirmation statements not overdue), indicating regulatory compliance and operational status.
• Ownership and Control: The sole director and 75-100% shareholder, Mary Ngugi, is also the person with significant control, which may facilitate swift decision-making.
• Investment Property Asset: The company holds investment property valued at £246,282, which represents the majority of its fixed assets and could provide potential future income or capital appreciation.

4. Due Diligence Notes:

• Valuation of Investment Property: The property valuation was conducted internally by the director who is not a qualified valuer; an independent professional valuation is necessary to verify the accuracy and fair value of this significant asset.
• Loan Terms and Repayment Schedule: Further details on the £300,163 loan are required, including lender identity, interest rates, repayment terms, and any security provided, to assess sustainability of debt servicing.
• Cash Flow Analysis: Investigate cash flow forecasts and operational income streams to evaluate the company’s ability to meet ongoing liabilities and service debt.
• Related Party Transactions: The £100 debtor balance owed by related parties should be reviewed for collectability and any potential conflicts of interest.
• Director’s Plans and Strategy: Understanding the director’s business plan for addressing the deficit and improving financial health is critical to assess operational sustainability.