LYNCH RENOVATION & DEVELOPMENT LTD

Executive Summary

LYNCH RENOVATION & DEVELOPMENT LTD displays critical financial distress with negative equity, persistent net current liabilities, and negligible cash flow. The company currently lacks the financial strength or liquidity to support credit facilities, relying heavily on director and related-party financing. We recommend declining credit until substantial improvement in financial metrics and operational cash generation is demonstrated.

LYNCH RENOVATION & DEVELOPMENT LTD - Analysis Report

Company Number: 14002921

Analysis Date: 2025-07-29 20:06 UTC

1. Credit Opinion: DECLINE
   LYNCH RENOVATION & DEVELOPMENT LTD exhibits significant financial weakness with persistent negative net current assets and shareholders’ funds. The company shows no turnover or profit data, minimal cash balances (£5), and current liabilities exceeding £15k, indicating an inability to meet short-term obligations from operational cash flows. The firm’s dependence on directors and a related company for financing, with no indication of repayment capacity, raises substantial credit risk. Without a clear trading history or evidence of cash generation, the company is not currently a viable candidate for credit extension.

2. Financial Strength:
   The balance sheet reflects ongoing losses with shareholders’ funds deteriorating from -£13,920 in 2023 to -£15,033 in 2024. Tangible fixed assets are minimal (£454) and declining due to depreciation, offering little collateral value. Net current liabilities stood at approximately -£15,485, driven by current creditors of £15,490 and almost no current assets beyond nominal cash. The company’s capital structure is weak, with negative equity and reliance on director-related party financing. Overall, the financial position is fragile and does not support additional credit risk.

3. Cash Flow Assessment:
   Cash on hand is negligible (£5), and there are no reported debtors or working capital to support liquidity. The company has zero employees recorded and no disclosed revenue streams, suggesting very limited operational activity or cash inflows. The reported current liabilities exceed available liquid assets significantly, indicating poor short-term liquidity and an inability to service debts from internal cash flows. The directors’ note confirms reliance on external financing without immediate repayment plans, underscoring cash flow vulnerability.

4. Monitoring Points:

• Monitor future filings for any improvement in net current assets and shareholder equity.
• Watch for evidence of revenue generation or cash inflows to support liquidity.
• Review related party balances and director financing arrangements for potential restructuring or calls for repayment.
• Assess any changes in director appointments or business strategy indicating turnaround efforts.
• Track overdue accounts or confirmation statements that may signal operational difficulties.