Company Number: 13333263

Analysis Date: 2025-07-29 20:01 UTC

1. Credit Opinion: APPROVE. RK (Bath) Limited is a small private limited company operating in the plastering industry, with a clean company status (active, not in liquidation) and up-to-date filings. The financials indicate positive net current assets and shareholders’ funds, showing financial stability. The absence of bank loans and overdrafts as of the latest accounts suggests no immediate external debt burden, reducing credit risk. The company demonstrates sound financial stewardship under a single director, with no adverse records. Given its modest size and relatively stable balance sheet, the company appears capable of meeting short-term obligations and servicing modest credit facilities.

2. Financial Strength: The balance sheet reflects a small but stable enterprise. Shareholders’ funds increased slightly from £59,609 in 2023 to £61,296 in 2024, indicating modest retained earnings accumulation. Net current assets improved marginally to £57,685, supported by current assets of £92,291 mainly in debtors (£90,532) and a small cash balance (£1,759). Fixed assets are minimal (£3,611 net book value), consistent with a service-based plastering business. Current liabilities decreased from £47,519 to £34,606, improving liquidity ratios. No bank loans are present, limiting financial gearing and risk. Overall, the company maintains a conservative financial position with low leverage.

3. Cash Flow Assessment: Liquidity is adequate but somewhat debtor-concentrated. The low cash balance (£1,759) compared to significant trade and other debtors (£90,532) suggests working capital is tied up in receivables. The company should be monitored for debtor collection efficiency to ensure cash flow remains positive. Current liabilities at £34,606 are well covered by current assets, providing a current ratio of approximately 2.7x, indicating comfortable short-term liquidity. Absence of overdraft or external debt reduces interest burden and cashflow pressure. Working capital management will remain critical for smooth operations and timely creditor payments.

4. Monitoring Points:

• Debtor Collection Period: Watch for prolonged receivables that could strain cash flow.
• Trade Creditors: Monitor payable days to ensure supplier relationships remain intact without overextension.
• Profitability Trends: Future accounts should be reviewed for consistent profit generation and retained earnings growth.
• Cash Reserves: Evaluate if cash balances improve or remain low relative to liabilities.
• Director Advances: Although the director loan account is referenced, its balance and terms should be reviewed if it becomes significant.
• Industry and Economic Conditions: As a small plastering business, sensitivity to construction sector cycles and local market demand must be considered.