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.