DEVARSH CAPITAL LIMITED

Executive Summary

Devarsh Capital Limited demonstrates a fragile financial position with negative equity and significant liquidity challenges driven by high current and long-term liabilities. The company’s asset base is primarily fixed assets with minimal liquid resources, limiting its capacity to service debt or absorb financial shocks. Given these factors, credit facilities are not advisable without substantial improvement in working capital and equity position.

DEVARSH CAPITAL LIMITED - Analysis Report

Company Number: 13889368

Analysis Date: 2025-07-20 18:44 UTC

1. Credit Opinion: DECLINE
   Devarsh Capital Limited exhibits significant financial weakness despite being a very young company incorporated in 2022. The company’s latest accounts show negative shareholders’ funds of £49,783 and persistent net current liabilities of approximately £254,000, indicating an over-reliance on long-term liabilities and poor liquidity. The fixed assets of £663,474 appear to be the primary asset backing, but the company’s working capital position is strained. This financial structure suggests limited ability to service additional debt or meet short-term obligations without external support. Given the negative equity, high current liabilities compared to minimal current assets, and lack of profitability or cash flow data, the company presents a high credit risk at this stage.

2. Financial Strength:

• Fixed assets remain constant at £663,474, likely reflecting property-related investments consistent with their real estate management SIC codes.
• Current assets are negligible (£6,980), primarily cash or receivables, insufficient to cover short-term creditors (£260,637).
• Net current liabilities are substantial (-£253,657), signaling liquidity stress.
• Long-term creditors stand at £459,600, contributing to negative net assets and shareholders’ deficit (£-49,783).
• The company’s balance sheet reflects a leveraged position with negative equity, which compromises its solvency and financial resilience.
• No audit was performed, and financial statements are micro-entity filleted accounts, limiting transparency.

3. Cash Flow Assessment:

• No explicit cash flow statement is provided, but the negative net current assets and high current liabilities relative to current assets imply tight working capital and potential cash flow constraints.
• The company may be dependent on external financing or capital injections from shareholders or related parties to meet short-term obligations.
• Minimal current assets relative to creditors raise concern about the company’s ability to manage day-to-day operational liquidity without additional funding.
• The absence of directors’ advances or guarantees disclosure suggests no direct financial support from directors is recorded, which could further heighten liquidity risk.

4. Monitoring Points:

• Watch for improvements in liquidity ratios, particularly current ratio and quick ratio, to assess working capital management.
• Monitor changes in shareholders’ funds and net assets to identify any capital restructuring or profit generation.
• Track creditor balances and the maturity profile of debts to evaluate refinancing risk.
• Review future filed accounts for evidence of operational cash flow generation or external funding support.
• Observe any changes in director involvement or significant control that might impact financial strategy or risk appetite.