R M FORMWORK LTD

Executive Summary

R M FORMWORK LTD is a small, newly incorporated construction installation company demonstrating modest financial growth and compliance with filing obligations. However, liquidity risks arise from significant current liabilities, particularly corporation tax and directors’ loans, which require close monitoring. Overall, the company presents a medium risk profile warranting further due diligence on cash flows and tax obligations to confirm operational sustainability.

R M FORMWORK LTD - Analysis Report

Company Number: 13921232

Analysis Date: 2025-07-29 12:09 UTC

1. Risk Rating: MEDIUM
   R M FORMWORK LTD shows improving net current assets and net assets between 2023 and 2024, indicating some financial strengthening. However, the company remains small with modest asset base and limited equity. The presence of significant corporation tax liabilities and directors’ loans as current liabilities introduce some short-term liquidity risk. The company is relatively new (incorporated 2022) and has limited operating history, which also adds uncertainty regarding operational stability.

2. Key Concerns:

• Liquidity and Working Capital: While net current assets improved to £25,847 in 2024, current liabilities increased substantially to £63,741, including £35,492 corporation tax and £18,955 directors’ loans, which may pressure cash flows.
• Tax Liabilities: The jump in corporation tax creditor from nil in 2023 to £35,492 in 2024 is notable; this could affect cash availability and needs to be monitored closely.
• Limited Scale and Operating History: Incorporated in 2022 with turnover under £300k, the company’s young age and small scale imply higher operational risk and limited financial resilience.

3. Positive Indicators:

• Improving Net Assets and Net Current Assets: Shareholders’ funds increased from £847 in 2023 to £25,847 in 2024, suggesting profitable operations or capital injection.
• No Overdue Filings: Accounts and confirmation statements are up to date, indicating compliance with regulatory requirements.
• Stable Management: Directors have been consistent since incorporation, with no indications of disqualifications or governance issues.

4. Due Diligence Notes:

• Investigate the nature and timing of corporation tax liability increase and confirm the company’s ability to meet tax obligations promptly.
• Review directors’ loan accounts to understand repayment terms and potential impact on liquidity.
• Examine cash flow statements (not provided) to assess actual cash generation and working capital cycle.
• Understand contract structure and revenue recognition policies given SIC code 43290 (other construction installation) to evaluate operational sustainability.
• Verify that the exemption from audit is appropriate and review any underlying financial statements or management accounts for additional insight.