LAXMI DEVELOPERS LIMITED

Executive Summary

Laxmi Developers Limited is in a precarious financial position with substantial negative equity and poor liquidity, undermining its ability to service debt or credit facilities. The company’s financial trajectory is deteriorating, and its balance sheet shows signs of insolvency with no apparent assets to offset liabilities. Credit approval is not recommended without significant financial restructuring or guarantees.

LAXMI DEVELOPERS LIMITED - Analysis Report

Company Number: 13909810

Analysis Date: 2025-07-20 17:09 UTC

1. Credit Opinion: DECLINE
   Laxmi Developers Limited demonstrates a very weak financial position with substantial negative net current assets and shareholders' funds, which have deteriorated significantly over the last two years. The company’s balance sheet shows negative equity of £47,777 as of March 2024, indicating an insolvency position on a going-concern basis. As a micro-entity incorporated recently in 2022, it has yet to establish a stable or positive financial track record. The absence of positive working capital and the increasing current liabilities relative to current assets raise serious concerns about its ability to meet short-term obligations and service any credit facilities. Given these factors, credit approval is not recommended without significant improvement or external guarantees.

2. Financial Strength:
   The company is in a poor financial state, reflected by persistently negative net current assets (£-47,777 in 2024 vs. £-1,234 in 2023) and negative shareholders’ funds. The total assets less current liabilities figure is negative, implying liabilities exceed assets, which is a sign of undercapitalization and financial distress. No fixed assets or tangible asset backing is reported, and current assets have effectively collapsed from £51,390 to just £100 within a year, suggesting liquidity erosion or asset write-offs. The company's micro-entity status limits the amount of financial disclosure but the available figures indicate no cushion against financial shocks.

3. Cash Flow Assessment:
   Liquidity is severely constrained, with current liabilities of £47,877 far outstripping minimal current assets (£100) as of the latest financial year. This negative working capital position suggests the company is not generating sufficient cash inflows or managing payables efficiently. There is no evidence of retained earnings or cash reserves to buffer operational cash requirements. The absence of reported cash flow statements limits detailed analysis, but the balance sheet alone implies likely cash flow difficulties, which would impair timely debt servicing and supplier payments.

4. Monitoring Points:

• Monitor future filings for evidence of improved working capital management, especially growth in current assets and reduction of current liabilities.
• Watch for any capital injections or shareholder loans that could restore positive equity.
• Track operational performance indicators such as turnover and profit margins if disclosed in future accounts or interim management reports.
• Observe director conduct and any related party transactions given sole control by one individual with 75-100% shareholding.
• Check for timely filing of accounts and confirmation statements to assess compliance and governance standards.