DTC DEVELOPMENTS (YORKSHIRE) LIMITED

Executive Summary

DTC DEVELOPMENTS (YORKSHIRE) LIMITED holds a solid asset base but suffers from severe liquidity constraints due to a significant working capital deficit. The company is solvent with growing equity but requires urgent attention to improve cash flow and short-term financial stability. Enhancing liquidity management and transparency will be key to sustaining long-term financial health.

DTC DEVELOPMENTS (YORKSHIRE) LIMITED - Analysis Report

Company Number: 13745576

Analysis Date: 2025-07-29 12:26 UTC

Financial Health Assessment: DTC DEVELOPMENTS (YORKSHIRE) LIMITED

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1. Financial Health Score: C

Explanation:
The company shows a stable but cautious financial position. While net assets and shareholders’ funds have doubled from £20,249 to £40,499 within the latest year, a critical symptom is the persistent and significant net current liabilities (working capital deficit). This indicates liquidity stress, which tempers the overall health grade. The company’s financial "vital signs" suggest it is solvent but operating with tight cash flow, warranting attention.

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2. Key Vital Signs:

• Fixed Assets: £172,375 (unchanged over 3 years)
  Interpretation: The company holds long-term assets, likely property or real estate investments, which form the backbone of its asset base.

• Current Assets: £1
  Interpretation: Critical concern. The company has virtually no liquid assets or short-term receivables to cover its immediate obligations.

• Current Liabilities: £131,877 (down from £152,127)
  Interpretation: Short-term debts remain substantial, though slightly improved. These must be met within a year, yet current assets are negligible.

• Net Current Assets (Working Capital): -£131,876
  Interpretation: Indicates significant liquidity distress. The company lacks sufficient short-term resources to pay its debts as they fall due, which is analogous to a patient with a weak pulse—functional but vulnerable.

• Net Assets / Shareholders’ Funds: £40,499 (up from £20,249)
  Interpretation: Positive and growing equity base, reflecting capital injections or retained earnings. This is the company’s financial "immune system," showing resilience.

• Profit and Loss Account: Not presented
  Interpretation: Absence of P&L data limits insight into operational performance and profitability. This is like missing vital signs on a medical chart.

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3. Diagnosis:

DTC DEVELOPMENTS (YORKSHIRE) LIMITED is a micro-entity operating in the real estate sector (owning/letting property). The company appears asset-rich but cash-poor, with a fixed asset base but severely limited liquid assets. The chronic working capital deficit suggests it may face challenges meeting short-term obligations without relying on external financing or capital injections.

The increase in net assets indicates some improvement, possibly due to capital contributions or revaluation of assets, but the lack of current assets to cover immediate liabilities signals symptoms of financial strain.

The absence of an audit and profit and loss reporting (permitted for micro-entities) means less transparency on income generation and expense management. The company’s financial health is stable but fragile—akin to a patient with a chronic condition under control but at risk if an unexpected shock occurs.

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4. Recommendations:

• Improve Liquidity Management:
  Explore ways to increase current assets, such as accelerating receivables, reducing inventory (if any), or holding more cash reserves. Negotiating extended payment terms with creditors may also ease short-term pressure.

• Operational Transparency:
  Consider voluntarily producing more detailed financial statements, including a profit and loss account, to better monitor and manage profitability and cash flow.

• Asset Utilisation:
  Assess if fixed assets can be leveraged more effectively, for example by generating rental income or considering sale and leaseback arrangements to raise cash.

• Capital Injection:
  If liquidity issues persist, raising additional equity or obtaining longer-term financing could provide a financial buffer, strengthening the balance sheet and reducing short-term risk.

• Financial Forecasting:
  Implement regular cash flow forecasting to anticipate liquidity needs and avoid surprises, ensuring the company remains solvent and operationally healthy.

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Executive Summary