DJ REINFORCEMENTS LTD

Executive Summary

DJ Reinforcements Ltd exhibits a concerning liability profile with large tax and director loan balances that elevate solvency and liquidity risks despite positive net assets. The company remains compliant with filings, but significant creditor classifications require further investigation. Investors should carefully review the nature of these liabilities and cash flow sustainability before considering exposure.

DJ REINFORCEMENTS LTD - Analysis Report

Company Number: 13150633

Analysis Date: 2025-07-29 15:16 UTC

1. Risk Rating: HIGH

Justification: The company shows a significant increase in liabilities falling due after more than one year (£202,384 in 2024 compared to none in 2023), combined with negative current liabilities in 2024 reported as (£-202,384) which appears inconsistent or misclassified. The large director loans (£82,134) and taxes and social security creditors (£138,425) due within one year also suggest cash flow pressures. Despite sizable net assets, the liability structure and creditor balances raise concerns about solvency and liquidity.

2. Key Concerns:

• Substantial non-current creditor balances (£202,384) newly reported in 2024, creating potential long-term solvency risk.
• Significant tax and social security liabilities (£138,425 current and £217,492 non-current) indicating possible tax arrears or disputes.
• Large director loans (£82,134) suggesting dependence on related party financing, which may not be sustainable or enforceable.

3. Positive Indicators:

• The company is active and compliant with filing deadlines, indicating regulatory compliance and governance discipline.
• Net assets and shareholders’ funds have increased significantly from £117,217 in 2023 to £283,850 in 2024, reflecting growth in retained earnings or revaluations.
• Positive net current assets of £56,937 in 2024, although reduced from prior years, still show some short-term asset coverage.

4. Due Diligence Notes:

• Clarify the nature and classification of the large creditor balances, particularly the non-current liabilities and their terms.
• Investigate the cause and status of the tax and social security liabilities to assess any risk of enforcement or penalties.
• Review the director loan agreements for repayment terms and assess the risk of these loans being called in or written off.
• Verify the accuracy of creditor and current liability figures, as some negative values and classifications may indicate reporting or presentation anomalies.
• Confirm operational cash flow generation and sustainability given zero reported employees and reliance on external financing.