RASONS Z LTD
Executive Summary
Rasons Z Ltd is currently operating with a highly leveraged balance sheet and negative working capital, posing significant solvency and liquidity risks. While asset ownership and regulatory compliance are positives, the negligible equity base and large creditor amounts warrant thorough investigation before investment. Further due diligence should focus on creditor terms, asset realizability, and cash flow sustainability to assess operational viability.
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This analysis is opinion only and should not be interpreted as financial advice.
RASONS Z LTD - Analysis Report
Risk Rating: HIGH
The company exhibits a high risk profile primarily due to severe liquidity constraints and a nearly negligible net asset base relative to its liabilities.Key Concerns:
- Liquidity Deficit: Current liabilities (£1,236,542) substantially exceed current assets (£16,102), resulting in negative net current assets (-£446), indicating potential difficulty in meeting short-term obligations.
- Leverage and Debt Structure: The company carries significant long-term creditors (£1,236,542) against fixed assets of similar value (£1,251,828), suggesting a highly leveraged position with little equity cushion.
- Minimal Equity and Working Capital: Net assets stand at £2,052, which is negligible relative to the scale of liabilities, raising concerns about solvency and financial resilience.
- Positive Indicators:
- Asset Backing: Ownership of fixed assets worth approximately £1.25 million may provide collateral value to creditors.
- Compliance with Filing Deadlines: The company is up to date with its accounts and confirmation statement filings, indicating adherence to regulatory requirements.
- No Employees: Zero staff count reduces operational expense burden, possibly reflecting a lean cost structure.
- Due Diligence Notes:
- Investigate the nature and terms of the long-term creditors to assess refinancing risks and covenant obligations.
- Evaluate the quality, liquidity, and valuation basis of the fixed assets to confirm their realizable value.
- Review cash flow forecasts, bank facilities, and any contingent liabilities that could affect liquidity.
- Confirm no undisclosed related party transactions or off-balance sheet liabilities.
- Ascertain the business model viability given the negative working capital and minimal equity.
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