RKF BUILDING & DEVELOPMENTS LTD

Executive Summary

RKF Building & Developments Ltd shows improving financial health with increasing net current assets and shareholders’ funds, indicating positive profitability and working capital management. The company maintains adequate liquidity but relies heavily on debtor collection for cash flow. Conditional credit approval is recommended, subject to ongoing monitoring of cash flow and receivables to ensure sustained payment capability.

RKF BUILDING & DEVELOPMENTS LTD - Analysis Report

Company Number: 13110466

Analysis Date: 2025-07-20 12:34 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   RKF Building & Developments Ltd demonstrates positive net current assets and growing shareholders’ funds over the last four years, indicating improving financial stability. The company’s liquidity position is modest but stable, with cash reserves covering approximately 60% of current liabilities in the latest year. However, the company is relatively young with low share capital (£1), no employees, and limited fixed assets, which suggests limited operating scale and modest capital backing. Approval is recommended with conditions requiring ongoing monitoring of cash flow and receivables collection efficiency to ensure the company maintains sufficient liquidity to service debt and meet obligations.

2. Financial Strength:
   The company’s balance sheet shows a steady increase in net current assets from £103 in 2021 to £19,573 in 2024 and shareholders’ funds rising from £103 to £19,573 over the same period. This growth in equity is a positive sign of retained earnings accumulation, reflecting profitability or capital injections. Current liabilities have decreased from £29,002 in 2021 to £17,860 in 2024, improving the working capital position. The lack of fixed assets and absence of long-term liabilities simplifies the risk profile but also indicates limited asset backing. Overall, the balance sheet is sound for a small construction business, with manageable liabilities and improving equity.

3. Cash Flow Assessment:
   Cash at bank declined from £15,983 in 2023 to £10,714 in 2024, which warrants closer scrutiny. Despite this reduction, cash remains adequate to cover immediate liabilities. Debtors have increased to £26,719, representing a sizeable portion of current assets, which may impact liquidity if not collected promptly. Accrued expenses and tax liabilities have decreased, which supports cash management efforts. The company’s working capital remains positive, suggesting it can meet short-term obligations. However, the concentration of current assets in debtors requires effective credit control to mitigate cash flow risk.

4. Monitoring Points:

• Receivables aging and collection performance to avoid cash flow strain.
• Cash balance trends to ensure liquidity is maintained above current liabilities.
• Profitability trends upon receipt of future accounts to confirm continued equity growth.
• Any increase in liabilities or changes in creditor terms that could impact liquidity.
• Director’s continued financial stewardship given the single director structure.