DHRUVA TARA HOMES LIMITED

Executive Summary

Dhruva Tara Homes Limited shows significant liquidity and solvency concerns with persistent negative net current assets and minimal shareholders’ funds, indicating a high risk of financial distress. While the company maintains compliance and holds tangible assets, the concentrated ownership and control alongside weak capitalization warrant careful scrutiny. Further due diligence on liabilities and cash flow management is recommended before considering investment.

DHRUVA TARA HOMES LIMITED - Analysis Report

Company Number: 13275798

Analysis Date: 2025-07-29 15:05 UTC

1. Risk Rating: HIGH
   The company exhibits significant liquidity stress, with persistent negative net current assets and substantial current liabilities far exceeding current assets. This raises concerns about its ability to meet short-term obligations.

2. Key Concerns:

• Liquidity Deficit: Current liabilities (~£187,713) vastly exceed current assets (_{£2,581), resulting in a negative working capital position (}-£118,472), which signals potential cash flow difficulties.
• Low Equity Base: Shareholders’ funds increased slightly but remain minimal (£7,353 as of 2024) compared to liabilities, indicating weak capitalization and limited financial buffer.
• Reliance on Single Director/PSC: The sole director and 100% owner, Mrs. Harika Yadavalli, concentrates control and risk, raising governance and succession concerns.

3. Positive Indicators:

• Stable Fixed Assets: Fixed assets remain relatively stable around £314,000, suggesting some tangible asset backing for the business.
• Timely Compliance: The company is up to date with filing accounts and confirmation statements, showing basic regulatory compliance and governance adherence.
• Active Status: The company is active and not in liquidation or administration, providing some operational continuity.

4. Due Diligence Notes:

• Investigate the nature and terms of the substantial current and long-term liabilities, including creditor identities and repayment schedules.
• Assess cash flow forecasts and working capital management plans to understand how the company intends to address liquidity pressures.
• Review the business model sustainability given the micro entity size, asset composition, and sector (real estate letting operations).
• Evaluate director capability and contingency plans given sole control by Mrs. Yadavalli.
• Confirm if there are any contingent liabilities or off-balance-sheet exposures not reflected in the accounts.