LDZC DEVELOPMENTS LTD

Executive Summary

LDZC Developments Ltd exhibits significant financial weakness with sustained negative equity and worsening liquidity. The company’s inability to cover short-term liabilities raises serious doubts about its capacity to service debt or accept additional credit. Given its micro-entity status, lack of growth indicators, and recent director resignations, credit approval is not recommended without substantial financial restructuring.

LDZC DEVELOPMENTS LTD - Analysis Report

Company Number: 12715153

Analysis Date: 2025-07-20 11:42 UTC

1. Credit Opinion:
   DECLINE. LDZC Developments Ltd demonstrates persistent negative net current assets and shareholders' funds over the past five years, indicating ongoing financial distress. The company's liabilities exceed its current assets by a significant margin (£71,613 negative net current assets as of July 2024). This weak balance sheet position undermines its ability to meet short-term obligations and service new or existing debt. Additionally, the lack of employees and unchanged micro-entity filing status suggest limited operational scale and growth prospects. The recent resignation of two directors may also imply management instability.

2. Financial Strength:
   The balance sheet reveals continuous erosion of equity, with shareholders' funds deepening from a negative £4,014 in 2020 to a negative £71,513 in 2024. Current liabilities consistently surpass current assets by substantial amounts, reflecting poor liquidity and a working capital deficit. The company holds minimal fixed assets or share capital (£100), and there is no evidence of retained earnings or reserves to cushion financial shocks. Such a position reflects high financial leverage and limited asset backing, impairing creditworthiness.

3. Cash Flow Assessment:
   The company’s working capital is negative and deteriorating, with current liabilities exceeding current assets by over £70k as of the latest accounts. This signals cash flow stress and challenges in meeting short-term debts or operational expenses without external funding. The absence of employees and limited asset base may constrain cash inflows and operational flexibility. No audit or detailed cash flow statements are available, but the balance sheet position strongly suggests liquidity risk.

4. Monitoring Points:

• Monitor quarterly cash flow and working capital trends to detect any further deterioration.
• Watch for any new director appointments or management changes affecting governance and financial strategy.
• Assess any changes in creditor terms or supplier payment behaviour that could signal worsening credit risk.
• Track the company’s ability to file accounts and confirmation statements on time, as delays may indicate operational or financial difficulties.
• Review any capital injections or restructuring attempts aimed at restoring solvency.