RICHWOOD LETTINGS LTD

Executive Summary

RICHWOOD LETTINGS LTD currently demonstrates a weak financial position with negative net assets and significant working capital deficits, indicating high credit risk. The company’s liquidity position is inadequate to meet short-term liabilities, and there is no evidence of profitability or cash flow strength. Credit facilities are not recommended until financial stability and operating performance improve.

RICHWOOD LETTINGS LTD - Analysis Report

Company Number: 14773784

Analysis Date: 2025-07-29 20:06 UTC

1. Credit Opinion: DECLINE
   RICHWOOD LETTINGS LTD is a micro-entity incorporated in April 2023 with very limited operating history. The latest accounts to April 2024 show significant working capital deficiency with current liabilities (£128,308) far exceeding current assets (£1,621), resulting in net current liabilities of £126,687. The company’s net assets are negative at -£1,687, indicating an insolvent balance sheet position. Such financial weakness suggests an inability to meet short-term obligations from existing resources. Without evidence of improved cash flows or capital injection, the risk of default is elevated. Given the negative net asset position, lack of profitability data, and modest scale, credit facilities should be declined at this stage.

2. Financial Strength:
   The balance sheet reveals fixed assets of £125,000 primarily representing property or long-term investments. However, the current liabilities massively outweigh current assets, implying severe liquidity constraints. The company is undercapitalized with shareholder funds negative, meaning liabilities exceed total assets. The absence of retained earnings and the small employee base (2 employees) further highlight the company’s fragile financial footing. The accounts prepared under micro-entity rules lack detailed profit and loss information, but the net liability position signals operating losses or initial start-up costs not yet overcome.

3. Cash Flow Assessment:
   Current assets of just £1,621—likely cash and receivables—versus current liabilities over £128k indicate the company is not generating sufficient cash to service immediate debts. Negative net current assets (working capital) point to an inability to cover short-term obligations without external funding. The company’s cash flow position is precarious, requiring close monitoring. No information on cash flow from operations or financing is provided, but the balance sheet suggests a reliance on additional capital or debt refinancing to stay solvent.

4. Monitoring Points:

• Monitor subsequent trading results and cash flow statements for evidence of improved liquidity and profitability.
• Watch for capital injections or shareholder loans that may shore up the balance sheet.
• Monitor payment behavior on trade creditors and short-term borrowings to detect stress signals.
• Review director appointments and any changes in control that could impact governance and financial stewardship.
• Track compliance with filing deadlines and any overdue accounts or confirmation statements.