VELKO CONSTRUCTION LTD

Executive Summary

VELKO CONSTRUCTION LTD is currently financially weak, with negative net assets and a working capital deficit indicating poor liquidity and solvency. The company’s financial trajectory is declining, raising serious concerns about its ability to meet debt obligations. Credit facilities are not advisable until significant financial improvements are demonstrated.

VELKO CONSTRUCTION LTD - Analysis Report

Company Number: 14470623

Analysis Date: 2025-07-29 21:00 UTC

1. Credit Opinion: DECLINE
   VELKO CONSTRUCTION LTD shows a deteriorating financial position with negative net assets (£-190) as of 30 November 2024 and a worsening working capital deficit. The company’s current liabilities exceed current assets by a substantial margin, indicating poor short-term liquidity and an inability to meet debts as they fall due. The negative equity position and persistent losses raise significant concerns about the company’s ability to service any credit facility. Absence of employees and limited asset base further weaken operational resilience. Given these factors, credit approval is not recommended at this stage.

2. Financial Strength:
   The balance sheet reflects weak financial strength. The company’s net current liabilities of £190 and negative shareholders’ funds indicate undercapitalization. There are no fixed assets, and current assets are minimal (£60), primarily cash or equivalents, insufficient to cover liabilities of £250. The trend shows a decline from prior year positive equity (£173 in 2023) to a negative position, signaling losses or withdrawals exceeding capital. This lack of net assets undermines creditor protection and increases insolvency risk.

3. Cash Flow Assessment:
   Liquidity is critically constrained. The company’s current liabilities exceed current assets, resulting in a net working capital deficit. This suggests cash flow shortages for day-to-day operations and debt servicing. The absence of employees implies low operational scale but also limited revenue generation capacity. No off-balance sheet liabilities are disclosed, but the poor working capital position indicates the company may struggle to meet short-term obligations without external funding or owner support.

4. Monitoring Points:

• Improvement or further deterioration of net current assets and net asset position in future filings.
• Timely filing of accounts and confirmation statements to assess ongoing compliance and operational status.
• Changes in ownership structure or director appointments that may impact governance and financial management.
• Evidence of capital injection or operational revenue growth to improve liquidity and solvency.
• Any emerging creditor disputes or late payments indicating cash flow stress.