DORU RENDERING LTD

Executive Summary

Doru Rendering Ltd is a very young micro-sized construction business currently exhibiting early financial distress signs, including negative working capital and shareholders’ funds. While typical for a start-up phase, urgent attention to liquidity and capital strengthening is critical to avoid deeper financial difficulties. With prudent management and potential capital support, the company can stabilize and improve its financial health.

DORU RENDERING LTD - Analysis Report

Company Number: 14503191

Analysis Date: 2025-07-29 14:55 UTC

Financial Health Assessment for DORU RENDERING LTD (as of 30 November 2024)

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1. Financial Health Score: D

Explanation:
The company is showing symptoms of financial distress with net current liabilities and negative shareholders' funds. The financial indicators suggest the company is not currently in a healthy state, with a small but negative working capital and net asset deficit. Given this is an early-stage micro-entity with limited financial activity, the weak capital base and liabilities exceeding current assets lower the overall financial health grade.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£270	Very low level of liquid assets (cash, receivables).
Current Liabilities	£321	Slightly higher than current assets, indicating short-term obligations exceeding liquid assets.
Net Current Assets (Working Capital)	£-51	Negative working capital signals potential liquidity stress — “symptom of distress.”
Total Assets Less Current Liabilities (Net Assets)	£-51	Negative net assets reflect a deficit in overall company value — “unhealthy balance sheet.”
Shareholders’ Funds	£-51	Negative equity, meaning liabilities exceed assets; shareholders’ investment is effectively eroded.

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3. Diagnosis

Doru Rendering Ltd is a very young micro-sized construction-related company (SIC 43290: Other construction installation) incorporated in late 2022. The financial snapshot as of November 2024 reveals:

• Liquidity Weakness: The company has a negative net current asset position, meaning it has insufficient short-term assets to cover its short-term liabilities. This is akin to a patient having a low blood pressure reading—indicating insufficient reserves to meet immediate demands.

• Capital Deficiency: Negative shareholders’ funds indicate that the company’s debts exceed its assets, a warning sign of undercapitalisation. This condition is similar to a patient showing signs of malnutrition—fundamental resources are insufficient for healthy operation.

• No Employees: The company reported no employees during the year, suggesting minimal operational activity or reliance on subcontractors, which might limit scale but also reduce fixed costs.

• Micro-Entity Filing: The company benefits from simplified accounting and audit exemptions, typical for a micro business, but this also means less detailed financial information is available to assess deeper financial health.

Overall, the company shows early symptoms of financial strain but given its very recent incorporation and small scale, it may be in a start-up phase still stabilising its operations and finances.

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4. Recommendations

Immediate Actions:

• Improve Liquidity: Increase current assets by accelerating cash collections, managing payables prudently, or injecting additional working capital. This is like ensuring the patient receives adequate fluids to stabilize.

• Strengthen Capital Base: Consider a capital injection from the shareholder or external investors to bring shareholders’ funds into positive territory. This is akin to reinforcing the patient's nutritional reserves.

• Cost Management: Maintain tight control over expenses and avoid premature scaling that could exacerbate the negative working capital condition.

• Operational Monitoring: Regularly monitor cash flow forecasts and working capital trends to detect early signs of worsening liquidity.

Medium to Long Term:

• Build Asset Base: Acquire fixed assets or contracts that can improve balance sheet strength.

• Operational Growth: Develop a sustainable revenue model that generates positive margins to rebuild retained earnings.

• Financial Reporting: Even as a micro-entity, consider enhanced internal financial reporting for better decision-making.

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