D.GRAVES LTD

Executive Summary

D.Graves Ltd shows signs of significant financial stress with declining liquidity and net asset value as of June 2024. The company’s reliance on director loans and rising current liabilities highlight solvency and cash flow risks that warrant further scrutiny. While operational continuity is evident, additional due diligence on financial performance and governance is recommended to fully assess investment risk.

D.GRAVES LTD - Analysis Report

Company Number: 12730456

Analysis Date: 2025-07-29 12:44 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits a significant deterioration in liquidity and net asset position over the most recent financial year. Net current liabilities and sharply reduced shareholders' funds indicate solvency concerns. The presence of director loans as a major debtor further suggests reliance on insider funding rather than external financing or operating cash flow.

2. Key Concerns:

• Liquidity deterioration: Net current assets have declined from a positive £1,739 in 2023 to a negative £448 in 2024, indicating potential cash flow stress.
• Solvency risk: Net assets have fallen sharply from £2,089 to £105 in one year, driven mainly by increased current liabilities (notably corporation tax). This signals weakening financial stability.
• Reliance on director loans: £1,870 of debtors are director loans, with no repayment recorded, potentially masking operational cash flow issues and raising governance concerns.

3. Positive Indicators:

• The company is small and benefits from exemption from audit, reducing compliance burden.
• Turnover and profitability data are not provided but the company remains active with no overdue filings or penalties.
• The director has maintained continuous involvement since incorporation, suggesting stable management.

4. Due Diligence Notes:

• Investigate the nature and terms of the director loan account, including any repayment schedule or interest charges.
• Examine the causes of the sharp increase in corporation tax liability and whether it reflects profitability or tax planning risks.
• Review cash flow statements and profit and loss accounts (not provided here) to assess operational performance and sustainability.
• Confirm the company’s client base, contracts, and revenue streams to evaluate ongoing business viability given the asset/liability profile.
• Verify if any contingent liabilities or off-balance sheet obligations exist that may exacerbate risk.