RAV TELECOMMS LIMITED

Executive Summary

RAV TELECOMMS LIMITED is a small private company demonstrating a solvent balance sheet with positive net assets and up-to-date statutory filings. However, the company's liquidity position is weakened by a steep decline in cash balances and high debtor levels, raising concerns about cash flow and debtor recoverability. Further investigation into director loans, long-term tax liabilities, and debtor quality is recommended to fully assess financial stability and operational sustainability.

RAV TELECOMMS LIMITED - Analysis Report

Company Number: 13624072

Analysis Date: 2025-07-29 16:04 UTC

1. Risk Rating: MEDIUM

Justification: The company shows positive net assets and working capital, indicating solvency at the balance sheet date. However, the very low cash balance relative to current assets and significant reliance on debtors pose liquidity concerns. The presence of director loans and long-term tax liabilities also suggests potential cash flow pressures. The company is relatively young and small, limiting financial history for deeper trend analysis.

2. Key Concerns:

• Liquidity Risk: Cash at bank dropped sharply from £25,068 in 2023 to only £368 in 2024 despite steady current assets, suggesting collection delays or cash flow strain.
• Debtors Concentration and Collection: Debtors remain high (£160,872), with a significant portion classified as "other debtors," some of which were previously recorded as long-term. This could indicate potential recoverability or classification issues.
• Long-Term Creditors and Director Loans: The company carries director loans (£18,280 current, previously £27,545) and outstanding tax liabilities due after one year (£3,232), which require scrutiny regarding repayment terms and potential impact on cash flow.

3. Positive Indicators:

• Solvent Position: Net assets increased from £183k to £197k year-on-year, showing retained earnings growth and overall solvency.
• No Overdue Filings: Accounts and confirmation statements are up to date, indicating compliance with statutory obligations.
• Stable Employee Base: Employee count steady at 5, suggesting operational stability at current scale.
• Ownership and Management: Clear control by a single PSC with full voting rights and director continuity (although one director resigned recently), reducing governance complexity.

4. Due Diligence Notes:

• Verify the nature and collectability of "other debtors," especially those previously classified as long-term assets.
• Investigate reasons for the significant decline in cash balances despite stable current assets.
• Review terms and conditions of director loans and tax liabilities to assess repayment risk.
• Assess revenue recognition policies and contract completeness given the SIC code "Other service activities not elsewhere classified" and limited financial disclosures.
• Confirm the impact of the recent director resignation on operational and governance stability.