Company Number: 13559371

Analysis Date: 2025-07-20 18:26 UTC

1. Credit Opinion: DECLINE
   Keystar (RC) Ltd demonstrates significant financial weakness, with negative net assets of £46,812 as at 29 February 2024, indicating insolvency on a balance sheet basis. The company's current liabilities (£866,907) exceed current assets (£820,095), resulting in a negative working capital position (-£46,812). The large creditor balance owed to a related party (Keystar Property Ltd) suggests reliance on intra-group funding rather than external cash generation. Given these factors, the company lacks sufficient financial strength and liquidity to service new or existing debt obligations reliably without additional capital support. Until profitability and balance sheet health improve, credit exposure should be avoided.

2. Financial Strength: Weak
   The balance sheet reveals a negative equity position with shareholders' funds at -£46,812. The company holds substantial stock (£794,067) as its primary current asset, which may be tied to real estate development projects but could face liquidity risk if these assets do not convert to cash timely. The reliance on a significant creditor balance related to the parent company implies limited independent financial resilience. The absence of positive retained earnings or capital injections since incorporation further undermines financial robustness.

3. Cash Flow Assessment: Constrained Liquidity
   Cash on hand is low (£24,412) relative to current liabilities, indicating limited liquidity to cover immediate obligations. The negative net current assets position suggests working capital shortfall, which may impair day-to-day operations and debt servicing. Debtors are negligible (£1,616), meaning limited incoming cash flow from trade receivables. The company's cash flow is likely dependent on funding from its parent or related parties rather than operational cash generation.

4. Monitoring Points:

• Track improvements in net asset position and reduction of negative equity.
• Monitor working capital changes, especially stock liquidation and creditor balances.
• Watch for sustained positive cash flow from operations or capital injections.
• Review related party transactions to assess the risk of continued reliance on intra-group debt.
• Confirm filing of timely accounts and returns to avoid regulatory risks.