DS2 HOME IMPROVEMENTS LTD

Executive Summary

DS2 Home Improvements Ltd shows high financial risk due to sustained negative net assets and working capital deficits, implying solvency and liquidity challenges. While compliance with filing requirements is satisfactory, the company’s small scale and minimal capital raise concerns about operational sustainability. Careful review of cash flow and liability structure is recommended before investment.

DS2 HOME IMPROVEMENTS LTD - Analysis Report

Company Number: 13293599

Analysis Date: 2025-07-20 18:07 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns, reflected in persistent negative net assets and net current liabilities over recent years. The financial position indicates inability to cover current liabilities with current assets, raising risk of cash flow distress.

2. Key Concerns:

• Negative Net Assets: The company reported net liabilities of £9,208 as of 31 March 2024, worsening from £13,127 the previous year, indicating accumulated losses or balance sheet erosion.
• Working Capital Deficit: Persistent negative net current assets (£13,236 deficit in 2024) suggest liquidity issues that could impair operational cash flow and meeting short-term obligations.
• Minimal Share Capital and Small Scale: With only £100 share capital and micro-entity status, the company has limited financial buffer and scale to absorb shocks or invest for growth.

3. Positive Indicators:

• Timely Filing and Compliance: No overdue accounts or confirmation statements, indicating good regulatory compliance and governance discipline.
• Active Operations: The company remains active since incorporation in 2021 with ongoing director involvement and no signs of liquidation or administration.
• Low Fixed Asset Base: Fixed assets are modest (£22,820), reducing risks of asset impairment or depreciation shocks.

4. Due Diligence Notes:

• Investigate causes of recurring net liabilities and whether losses are operational or due to accounting adjustments.
• Review cash flow statements or internal management accounts (not provided) to assess liquidity trajectory and ability to pay creditors on time.
• Confirm nature and terms of current liabilities, including any related party loans or overdue trade creditors.
• Assess business model sustainability given small scale, no employees reported, and sector risks in building development (SIC 41100).
• Validate director and shareholder backgrounds for any conflicts or financial support commitments.