Company Number: 12576587

Analysis Date: 2025-07-19 12:23 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks primarily due to very large current liabilities far exceeding current assets, resulting in a negative working capital position that has persisted and worsened over multiple years.

2. Key Concerns:

• Severe Negative Net Current Assets: As of the latest accounts (2024), current liabilities (£189,021) vastly exceed current assets (£752), yielding net current liabilities of approximately £188k. This indicates potential difficulties in meeting short-term obligations.
• Persistent and Growing Working Capital Deficit: The negative net current asset position has been consistent for at least four years, with no evidence of improvement—suggesting ongoing cash flow pressure or structural funding issues.
• Minimal Cash Reserves: The company reports zero cash at bank as of 2024, a deterioration from prior years, which restricts operational flexibility and heightens liquidity risk.

3. Positive Indicators:

• Stable Investment Property Asset: The company holds an investment property valued at £235,000, unchanged in value year-on-year, providing a tangible asset base.
• Increasing Net Assets and Shareholders’ Funds: Despite liquidity challenges, net assets have risen from £128 in 2020 to £41,565 in 2024, indicating accumulation of retained earnings or reserves.
• No Overdue Filings or Compliance Issues: The company’s accounts and confirmation statements are up to date with no overdue filings, reflecting good regulatory compliance.

4. Due Diligence Notes:

• Examine Debt Structure: Clarify the nature and terms of the significant current liabilities (£189k), including whether these are bank loans, supplier debts, or related party loans and their repayment schedules.
• Cash Flow Analysis: Review detailed cash flow statements or management accounts to assess operational cash generation and the company’s ability to service liabilities without asset disposals.
• Valuation and Liquidity of Investment Property: Confirm the valuation approach and marketability of the investment property to understand if it can realistically be leveraged or sold to improve liquidity.
• Directors’ Plans and Funding Sources: Investigate directors’ strategies to address the working capital deficit, including any planned equity injections or refinancing.
• Profit & Loss Information: As the P&L account is not included, request underlying profitability data to gauge sustainable earnings and operational viability.

Executive Summary:
DJ & KA Property Limited demonstrates significant liquidity and solvency risks due to a prolonged and large working capital deficit coupled with negligible cash reserves. While the company holds a substantial investment property and maintains regulatory compliance, the current financial structure raises concerns about its ability to meet short-term obligations and sustain operations without external funding or asset liquidation. Further analysis of debt terms, cash flow, and profitability is essential for a comprehensive risk assessment.