R D CHESHIRE DEVELOPMENTS LIMITED

Executive Summary

R D Cheshire Developments Limited is a relatively new building development company showing early signs of financial stabilization after initial losses. While there is modest improvement in net assets and cash balances, the company still faces working capital constraints and limited equity buffer. Credit approval is recommended with conditions focusing on liquidity monitoring and ongoing financial performance assessment to mitigate risk.

R D CHESHIRE DEVELOPMENTS LIMITED - Analysis Report

Company Number: 14394153

Analysis Date: 2025-07-29 20:23 UTC

1. Credit Opinion: CONDITIONAL APPROVAL.
   R D Cheshire Developments Limited is an active private limited company incorporated in October 2022 and engaged in building development projects (SIC 41100). The company has shown improvement from negative net assets (£-4,495 in 2023) to a small positive net asset position (£683 in 2024). However, net current liabilities remain negative at £4,093, indicating ongoing working capital pressure. Cash balances have increased modestly but remain limited relative to current liabilities. The company is young with limited trading history and modest fixed assets. Directors have declared no audit exemption and financial statements are unaudited, so some caution is warranted. The credit decision should be conditional on continued monitoring of liquidity, profitability, and capital structure improvements.

2. Financial Strength:
   The balance sheet shows a marginally positive net asset position of £683 as of October 2024, a recovery from prior years’ deficits. Fixed assets have decreased from £9,608 to £4,776, reflecting depreciation and possibly disposals. Current assets increased to £35,579 mainly driven by cash (£18,540) and work in progress stock (£15,000), but current liabilities remain high at £39,672. The company’s gearing is moderate with no long-term liabilities reported, but negative working capital suggests short-term funding stress. Shareholders’ funds are minimal, pointing to a fragile equity base. Overall, the financial strength is weak but improving.

3. Cash Flow Assessment:
   Cash at bank increased from £15,960 (2023) to £18,540 (2024), indicating a modest improvement in liquidity. However, the negative net current assets of £4,093 highlight that current liabilities exceed current assets, which could compromise the company’s ability to meet short-term obligations without additional funding. The increase in stock (work in progress) ties up cash, and trade creditors and other creditors amount to nearly £40k. The company’s cash flow management should be closely scrutinized to ensure receivables collection and timely creditor payments. The small scale of operations (average 2 employees) limits overhead, but cash flow remains tight.

4. Monitoring Points:

• Continued improvement or stabilization of net current assets and positive working capital.
• Cash flow trends, particularly cash conversion from work in progress and debtor collections.
• Profitability indicators once profit and loss data becomes available.
• Any increase in debt or contingent liabilities that could impact liquidity.
• Director conduct and any changes in management or ownership that may affect governance.
• Timely filing of accounts and confirmation statements to maintain regulatory compliance.