DMF FINANCIAL LIMITED

Executive Summary

DMF Financial Limited is currently facing heightened solvency and liquidity risks, evidenced by negative net current assets and shareholders’ funds as of its latest financial year. While the company remains compliant with statutory filings and operates under a going concern basis, the significant increase in debtors and corresponding cash depletion raise concerns over operational cash flow and debtor management. Further due diligence into debtor quality and creditor obligations is recommended to fully assess financial stability.

DMF FINANCIAL LIMITED - Analysis Report

Company Number: 13033484

Analysis Date: 2025-07-29 14:52 UTC

1. Risk Rating: HIGH
   The company exhibits a significant deterioration in net current assets and shareholders’ funds, moving from positive equity of £16,702 in 2022 to negative equity of approximately £19,000 in 2023. This signals solvency challenges and potential inability to meet liabilities.

2. Key Concerns:

• Negative Net Current Assets and Shareholders’ Funds: The net current liabilities of £18,941 as of November 2023 indicate liquidity pressure. The drop from a positive working capital position in prior years is a red flag for operational cash flow stress.
• High Debtors Relative to Cash: Debtors increased substantially to over £2.6 million while cash reserves dropped dramatically to just £16,075, suggesting potential collection issues or concentration risk on receivables.
• Reliance on a Single Director and Owner: Mr. Richard John Walters holds 75-100% ownership and is the sole director, which concentrates control and may limit governance oversight and risk diversification.

3. Positive Indicators:

• Current Filing and Compliance: The company’s accounts and confirmation statement filings are up to date with no overdue returns or penalties noted, indicating compliance with statutory requirements.
• Established Credit Granting SIC Codes: The company operates in a specialized consumer credit granting sector, which can be profitable if managed well, and it is registered as a private limited company, limiting liability to shareholders.
• Going Concern Statement: The director affirms the company is a going concern, suggesting confidence in short-term survival despite financial challenges.

4. Due Diligence Notes:

• Investigate Debtor Quality and Collection Risks: The large increase in debtors should be analyzed for aging, concentration, and recoverability to assess liquidity risk.
• Examine Creditor Composition: Understanding the nature and terms of £2.65 million current liabilities is critical to evaluate payment obligations and potential refinancing or restructuring needs.
• Review Director’s Strategy and Financial Plans: Given the negative equity and sole director control, review any plans to restore solvency, capital injection intentions, or operational changes.
• Assess External Funding or Guarantees: Check for any external financial support or guarantees that may mitigate risk.