SWORD DYNAMIC PROPERTIES LIMITED

Executive Summary

Sword Dynamic Properties Limited presents a solid net asset position supported by investment properties but currently exhibits a working capital deficit and negative liquidity indicators. The company relies significantly on related party loans to meet short-term obligations. Conditional credit approval is recommended with strict monitoring of liquidity metrics and ongoing group support to mitigate short-term financial risks.

SWORD DYNAMIC PROPERTIES LIMITED - Analysis Report

Company Number: 13976336

Analysis Date: 2025-07-20 17:20 UTC

1. Credit Opinion: CONDITIONAL APPROVAL. Sword Dynamic Properties Limited is an active private limited company engaged in real estate letting, recently incorporated in 2022. The company currently holds a dormant account classification but has filed accounts for 2024 showing significant investment property assets. The large increase in current liabilities to £408,701 from a negligible £3,293 in 2023 and the resulting negative net current assets position (-£376,770) raise concerns regarding short-term liquidity and working capital management. However, net assets remain strong at £891,242 supported by investment property holdings. The company has loans from related parties totaling £519,728, indicating reliance on group funding which may mitigate liquidity risks. Approval is recommended with conditions to monitor liquidity closely and to review cash flow forecasts regularly.

2. Financial Strength: The balance sheet reflects strong net asset backing primarily due to investment properties valued at approximately £1.29 million. The fixed assets have grown substantially from £895k to £1.31 million, indicating capital expenditure or acquisitions. Despite the strong asset base, current liabilities have increased considerably, creating a working capital deficit. The company’s equity remains solid at £891k with retained earnings showing modest growth from £879k in 2023. The absence of trade debtors and minimal tangible assets beyond property underlines the company's asset-heavy profile typical of real estate operations. The company benefits from group ownership, which could provide financial support if required.

3. Cash Flow Assessment: Cash held increased modestly from £17,354 to £31,931, but this is insufficient to cover the current liabilities of over £408k, reflecting potential liquidity stress in the short term. The negative net current assets position indicates reliance on external or intercompany funding to meet immediate obligations. The related party loans of £519,728 on the balance sheet support this view, evidencing that the company depends on group financing rather than operational cash inflows. Since the company is classified as dormant but holds investment properties, it likely has limited operating cash flow and must maintain adequate funding lines or capital injections to service liabilities.

4. Monitoring Points:

• Liquidity and working capital trends, particularly the current ratio and cash runway.
• Related party loan balances and repayment terms, ensuring ongoing group support.
• Investment property valuations and any impairments that could affect net asset value.
• Timely filing of accounts and confirmation statements to maintain regulatory compliance.
• Changes in current liabilities composition to detect any emerging creditor pressure.
• Directors’ adherence to going concern assumptions and plans for operational revenue generation if applicable.