Company Number: 12765341

Analysis Date: 2025-07-29 20:52 UTC

1. Risk Rating: MEDIUM
   While Deep Patel Ltd maintains positive net current assets and shareholders’ funds, there is a notable deterioration in liquidity evidenced by a significant reduction in cash balances from £63,913 (2023) to £20,784 (2024). The increased current liabilities, particularly amounts owed to group undertakings, also contribute to the medium risk level.

2. Key Concerns:

• Liquidity Decline: Cash reserves have diminished substantially over the last year, which may impact the company’s ability to meet immediate obligations.
• Related Party Balances: Large debtor and creditor balances with group undertakings (£69,216 and £62,638 respectively) raise concerns about dependency on affiliated entities and potential cash flow circularity.
• Thin Operating Base: The company employs only one person (the director), indicating limited operational scale which could affect sustainability and growth prospects.

3. Positive Indicators:

• Positive Working Capital: The company reports positive net current assets (£16,830) and shareholders’ funds, indicating solvency.
• No Filing Overdue: All statutory filings including accounts and confirmation statements are up to date, reflecting regulatory compliance.
• Ownership and Control: The sole director and 100% shareholder is consistent, suggesting clear governance and control structures without apparent director turnover or disqualification.

4. Due Diligence Notes:

• Review the nature of transactions with group undertakings to assess the quality and collectability of intercompany debts and the terms of intercompany liabilities.
• Investigate the cash flow trends and underlying business operations to understand causes of cash depletion and whether it is temporary or structural.
• Obtain management commentary on business plans and sustainability, given the limited employee base and reliance on related parties.
• Confirm if there are any contingent liabilities or off-balance sheet commitments not disclosed in the accounts.