R DAVEY CONTRACTING LTD

Executive Summary

R Davey Contracting Ltd demonstrates early-stage financial stability with positive working capital and cash reserves but remains lightly capitalized with some long-term liabilities and provisions that warrant close monitoring. Conditional credit approval is recommended with strict oversight of liquidity and creditor obligations as the company develops its trading history. Overall, the company shows potential but requires prudent credit limits due to its nascent status and limited financial track record.

R DAVEY CONTRACTING LTD - Analysis Report

Company Number: 14923997

Analysis Date: 2025-07-19 12:22 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   R Davey Contracting Ltd is a newly incorporated entity (June 2023) with its first set of accounts just filed. The company shows modest net assets (£2,843) and positive net current assets (£10,369), indicating some working capital buffer. However, the company has a significant long-term creditor balance (£20,000) and provisions (£2,926) which reduces net assets and may indicate some contingent liabilities or obligations. Given its short trading history and limited financial scale, credit exposure should be cautiously limited. Approval may be granted conditionally with monitoring of cash flows and liabilities, especially the long-term creditor position and provisions.

2. Financial Strength:
   The balance sheet shows net assets of £2,843, reflecting initial equity plus retained earnings from the first trading period. Tangible fixed assets (plant and machinery) amount to £15,400, forming the bulk of the asset base. Current assets total £29,106, supported by cash of £20,711 and debtors of £8,395. Current liabilities are £18,737, resulting in positive working capital. The company’s capital structure is modest, with only £1 share capital issued, indicating early-stage capitalization. The £20,000 creditor due after more than one year represents a material liability that impacts financial resilience. The provision of £2,926 further reduces net equity cushion.

3. Cash Flow Assessment:
   Cash at bank of £20,711 is a positive indicator of liquidity. The company’s current liabilities (£18,737) are comfortably covered by current assets, yielding a current ratio above 1.5, which suggests adequate short-term liquidity to meet obligations. Debtors balance is relatively small but appropriate for the size of the business. The company has a single employee (director), so payroll exposure is minimal. However, the long-term creditor balance and provisions may affect future cash outflows and should be considered in liquidity planning.

4. Monitoring Points:

• Track the evolution of long-term liabilities and provisions to understand their nature and impact on cash flow.
• Monitor cash flow statements and debtor collection to ensure working capital remains positive.
• Review subsequent trading performance and profitability to build retained earnings and strengthen equity.
• Assess any changes in director’s credit exposure or guarantees since the company is closely held by a single controlling director.
• Ensure timely filing of subsequent accounts and confirmation statements for ongoing transparency.