R.R. DEVELOPMENTS (KD) LTD

Executive Summary

R.R. DEVELOPMENTS (KD) LTD currently shows signs of financial strain with negative working capital and net liabilities despite holding significant fixed assets. The company’s financial health grade is D, indicating caution due to liquidity and solvency concerns. Immediate actions to improve cash flow, restructure debt, and leverage assets are recommended to support a more stable financial future.

R.R. DEVELOPMENTS (KD) LTD - Analysis Report

Company Number: 15168939

Analysis Date: 2025-07-20 19:13 UTC

Financial Health Assessment of R.R. DEVELOPMENTS (KD) LTD as of 30 September 2024

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1. Financial Health Score: D

Explanation:
The company exhibits significant financial strain indicated by negative net assets and working capital, which are symptoms of financial distress. While it is still operational and has valuable fixed assets, the inability to cover current liabilities with current assets and the presence of long-term creditors exceeding asset value warrant a cautious and urgent response.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	351,500	Strong base of long-term assets, likely property or real estate.
Current Assets	1,256	Very low liquid assets available to pay short-term debts.
Current Liabilities	133,754	Short-term debts due within a year, high relative to current assets.
Net Current Assets (Working Capital)	-122,723	Negative working capital; a red flag indicating cash flow problems.
Creditors Due After One Year	229,965	Significant long-term debt, exceeding total assets less current liabilities.
Net Assets (Shareholders’ Funds)	-3,938	Negative equity; company owes more than it owns overall.

Vital Signs Interpretation:

• Healthy cash flow is absent; the company cannot cover its immediate obligations with available liquid assets.
• The symptom of distress is the negative working capital (-£122,723), indicating potential liquidity crunch.
• The fixed assets of £351,500 provide a cushion but are illiquid and may not be easily converted to cash to meet short-term obligations.
• Negative net assets (-£3,938) suggest the company is technically insolvent on a balance sheet basis, though the deficit is small relative to asset size.
• The company is still active and not in liquidation or administration, but the financial position suggests careful monitoring is essential.

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3. Diagnosis: Financial Condition Assessment

R.R. DEVELOPMENTS (KD) LTD is a newly incorporated micro-entity operating in the real estate letting sector. It holds substantial fixed assets, likely property, but is burdened with significant liabilities, both current and long-term. The negative working capital and net liabilities point to underlying cash flow and solvency issues. This "symptom of distress" could stem from leveraging property assets with debt financing, common in real estate ventures.

The company's ability to generate operating income or convert assets quickly into cash is unproven at this stage, given its start date in late 2023 and no employees reported. The lack of liquidity might reflect initial investment and financing structure rather than ongoing operational issues, but it still poses a risk to financial stability.

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4. Recommendations: Path to Improved Financial Wellness

• Improve Liquidity: Explore ways to increase current assets, especially cash or receivables, to cover short-term liabilities. This might include renegotiating creditor terms or injecting working capital.
• Debt Restructuring: Engage with creditors regarding the large long-term debt (£229,965) to potentially extend terms or reduce interest burdens, easing cash flow pressure.
• Asset Utilization: Assess whether the fixed assets (likely real estate) can generate rental income or be leveraged further to improve cash inflows.
• Operational Planning: Develop a clear business plan focusing on revenue generation to ensure sustainable cash flows and profitability.
• Monitor Financial Health: Regularly review financial statements to detect early warning signs of deterioration and take prompt corrective action.
• Professional Advice: Consider consulting with financial advisors specializing in real estate and corporate restructuring to optimize capital structure.

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