RED LOTUS PRIVATE LIMITED

Executive Summary

Red Lotus Private Limited remains a small, micro-entity nursing home business with a concentrated ownership structure and timely compliance. The company’s financial position shows declining net assets and tight liquidity, warranting cautious credit exposure. Careful monitoring of working capital and cash flow metrics is essential to ensure ongoing repayment capacity.

RED LOTUS PRIVATE LIMITED - Analysis Report

Company Number: 13461415

Analysis Date: 2025-07-29 21:00 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Red Lotus Private Limited currently demonstrates modest financial strength consistent with a micro-entity in the medical nursing home sector. The company is active with timely filings and a single director/owner showing committed control. However, the declining net assets and net current assets over the last year, coupled with very minimal fixed assets and a narrow working capital margin, suggest limited financial buffer. Credit should be extended cautiously, possibly with limits or guarantees, and contingent on updated cash flow projections and monitoring of client concentration or payment terms.

2. Financial Strength:
   The company’s net assets have decreased significantly from £2,059 in 2023 to £906 in 2024, indicating a reduction in equity base by over 55%. Fixed assets are negligible (£240), reflecting little investment in long-term resources. Current assets increased notably due to a rise in cash or receivables (£10,543 vs £5,586), but current liabilities also jumped substantially from £3,887 to £9,877. This caused net current assets to fall from £1,699 to £666, revealing tighter working capital despite increased current assets. The balance sheet is thin with limited reserves, reflecting micro-entity scale and modest capitalization.

3. Cash Flow Assessment:
   The increase in current liabilities relative to current assets suggests potential liquidity pressures. The narrow positive net current assets of £666 indicates limited buffer to meet short-term obligations. Without detailed cash flow statements, it’s unclear if cash inflows from operations are sufficient to cover liabilities as they fall due. The company has maintained just one employee, implying low overheads, but the tight working capital position necessitates close monitoring of receivables collection and creditor payment terms to avoid cash flow strain.

4. Monitoring Points:

• Track net current assets and liquidity ratios quarterly to detect any worsening in working capital.
• Review turnover and profitability trends once available to assess operational sustainability.
• Monitor director’s continued involvement and any changes in ownership or control.
• Assess accounts receivable aging and payment patterns from clients to identify collection risks.
• Watch for any overdue filings or changes in company status that may indicate distress.