R & C CATERING LIMITED

Executive Summary

R & C Catering Limited operates in the event catering industry with small-scale financials and consistent negative working capital, raising moderate liquidity concerns. While the company remains compliant with filings and holds modest net assets, limited cash reserves and declining fixed assets warrant careful monitoring. Further due diligence on cash flows, debtor quality, and operational sustainability is recommended to fully assess financial stability.

R & C CATERING LIMITED - Analysis Report

Company Number: 12746208

Analysis Date: 2025-07-29 14:14 UTC

1. Risk Rating: MEDIUM

Justification: R & C Catering Limited shows ongoing negative net current assets (working capital deficit) over multiple years, indicating liquidity challenges. However, the company remains active with recent filings up to date and modest positive net assets. The financial scale is small, and there is some improvement in net assets from prior years, but the liquidity position and low cash balances pose solvency risks if operational cash flows are insufficient.

2. Key Concerns:

• Persistent negative net current assets (£-1,873 in 2024) reflecting current liabilities exceeding current assets, suggesting potential short-term liquidity issues.
• Very low cash on hand (£118 in 2024) relative to current liabilities (£13,862), which could impede meeting immediate obligations.
• Decline in tangible fixed assets net book value (from £4,478 in 2023 to £2,318 in 2024), which may reflect asset disposals or accelerated depreciation impacting operational capacity or asset backing.

3. Positive Indicators:

• The company has timely filed annual accounts and confirmation statements, with no overdue filings, indicating regulatory compliance.
• Modest but positive net assets (£445 in 2024) and shareholders’ funds, showing some equity buffer.
• Increase in debtors from £6,636 in 2023 to £10,871 in 2024, which may indicate rising sales or receivables growth.
• Active directors with relevant professional backgrounds (lawyer and business person) potentially supporting sound governance.

4. Due Diligence Notes:

• Review detailed cash flow statements and management accounts to assess operational cash generation and liquidity management.
• Investigate the nature and collectability of trade debtors, given their significant proportion of current assets.
• Examine reasons behind the decrease in fixed assets and any impact on operational capabilities.
• Confirm any off-balance sheet liabilities or contingent liabilities not visible in abridged accounts.
• Assess director loans shown in notes for any impact on company solvency or related party transactions.
• Evaluate the company’s business model and client base stability within the event catering sector, which can be volatile.