SHAH & BHATIA PROPERTIES LTD

Executive Summary

Shah & Bhatia Properties Ltd is a recently incorporated micro-entity with a weak liquidity profile and minimal equity, facing significant short-term liabilities exceeding current assets. The company’s balance sheet is heavily leveraged against fixed assets, and it lacks operational scale or cash flow visibility, leading to a high credit risk. Approval of credit facilities is not recommended without substantial improvement in liquidity or capital structure.

SHAH & BHATIA PROPERTIES LTD - Analysis Report

Company Number: 13952996

Analysis Date: 2025-07-20 14:49 UTC

1. Credit Opinion: DECLINE
   Shah & Bhatia Properties Ltd shows a very weak liquidity position with net current liabilities of approximately £51k and minimal current assets (£5.9k) against short-term liabilities (~£137.9k). The company’s net assets are marginal at £4,079 and have shown only slight improvement over two years. Given the company’s micro-entity status, limited operating history since incorporation in 2022, and significant current liabilities exceeding current assets, the capacity to service any additional debt or credit facility is highly constrained. Without substantial cash flow or equity injection, credit risk is high.

2. Financial Strength:
   The balance sheet is dominated by fixed assets valued at around £193.5k, presumably property-related given the SIC codes related to real estate. However, the company carries a large creditor balance due after one year (£137,975), indicating significant long-term obligations or loans secured against these assets. Shareholders’ funds are minimal, reflecting low retained earnings or capital reserves. The company has no employees besides directors, suggesting a lean operating model but limited scale.

3. Cash Flow Assessment:
   Current assets are very low, mainly cash or receivables at £5,908, while current liabilities are £137,975, yielding a negative working capital position (-£50,939). This indicates immediate liquidity risk and limited buffer to cover short-term obligations. The absence of P&L data and profit reserves restricts visibility on operational cash flows, but the negative net current assets and small equity base strongly suggest insufficient internal cash generation to support debt repayment.

4. Monitoring Points:

• Liquidity trends: Monitor changes in current assets and liabilities to assess if working capital improves.
• Debt servicing: Check for timely payment of creditors and interest obligations.
• Equity injections or capital restructuring: Any fresh funding from shareholders would improve credit quality.
• Operating performance disclosures: Future accounts should provide P&L data to assess profitability and cash generation.
• Director changes or PSC shifts that may affect control and financial strategy.