RH DESIGN & DEVELOP LTD

Executive Summary

RH DESIGN & DEVELOP LTD demonstrates adequate financial strength with positive net assets and strong liquidity, supported by healthy cash reserves and working capital. While the company’s profitability appears to have softened slightly, it maintains the ability to meet short-term obligations. Ongoing monitoring of profitability and debtor management is advised to ensure continued creditworthiness.

RH DESIGN & DEVELOP LTD - Analysis Report

Company Number: 13143125

Analysis Date: 2025-07-20 16:27 UTC

1. Credit Opinion: APPROVE with caution. RH DESIGN & DEVELOP LTD is a small private limited company engaged in management consultancy (SIC 70229). The company shows positive net assets and net current assets with no overdue filings, indicating compliance and operational continuity. However, the slight decline in net assets from £48,309 in 2023 to £41,609 in 2024 and the increase in current liabilities warrant monitoring. The company appears capable of servicing short-term obligations given healthy cash balances but the reduction in shareholders’ funds suggests some pressure on retained earnings.

2. Financial Strength: The company exhibits a sound balance sheet with net assets of £41,609 as of 31 December 2024, supported predominantly by current assets (£85,825) against current liabilities (£44,335), yielding net current assets of £41,490. Fixed assets are minimal (£119 net book value), consistent with a consultancy business model that is not capital intensive. The equity base is stable though it has decreased by approximately 14% year-on-year, primarily due to reduced profit reserves. Share capital remains nominal (£6). The company's leverage is low, with no indication of long-term debt, indicating conservative financial management.

3. Cash Flow Assessment: Liquidity is strong, with cash holdings of £72,927 nearly covering current liabilities of £44,335, providing a comfortable current ratio (~1.93). Trade debtors increased year over year (£8,280 to £12,898), which may lengthen cash conversion cycles if collection is not prompt but currently does not pose an immediate liquidity risk. Working capital remains positive and robust, supporting ongoing operational needs and short-term creditor commitments. There is no indication of cash flow constraints from the data provided.

4. Monitoring Points:

• Profitability trends: The decline in retained earnings should be investigated to ensure profitability is sustainable.
• Debtor collection efficiency: Rising trade debtors could impact liquidity if not managed well.
• Current liabilities growth: Increasing short-term creditors may reflect rising operational costs or delayed payments.
• Compliance: Continuation of timely filings and statutory compliance.
• Market conditions: As a consultancy, business volumes can be sensitive to economic cycles; watch for revenue volatility.