YD & CO ENGINEERING LTD

Executive Summary

YD & Co Engineering Ltd exhibits significant financial distress characterized by persistent negative net assets and zero cash availability, raising high solvency and liquidity risks. While regulatory compliance is maintained, the company’s operational scale and financial sustainability require careful scrutiny. Further due diligence into its business model, cash flow projections, and director financing arrangements is essential before considering investment.

YD & CO ENGINEERING LTD - Analysis Report

Company Number: 12909923

Analysis Date: 2025-07-29 20:32 UTC

1. Risk Rating: HIGH
   Justification: The company shows persistent negative net assets and net current liabilities over multiple years, indicating ongoing solvency challenges. Zero cash balance in the latest year raises significant liquidity concerns, and reliance on director’s loan account as primary creditor exposes financial vulnerability.

2. Key Concerns:

• Solvency Risk: Negative shareholders’ funds of approximately £3,125 consistently over the past four years point to the company’s inability to cover its liabilities from assets.
• Liquidity Concerns: As of the latest financial year, current assets and cash are reported at zero, while current liabilities remain above £3,000, indicating immediate cash flow issues.
• Operational Stability: The company has only one employee (the managing director), minimal asset base, and no reported turnover data, suggesting limited operational scale and potential sustainability risks.

3. Positive Indicators:

• Compliance: The company files its accounts and confirmation statements on time with no overdue filings, indicating good regulatory compliance.
• Governance: Stable management with the same director since incorporation and no indication of director disqualifications or regulatory sanctions.
• Small Company Status: Qualifies for small company reporting exemptions which reduce administrative burden, potentially easing cost pressures.

4. Due Diligence Notes:

• Investigate the nature and terms of the director’s loan account, including repayment plans and whether additional financial support is expected.
• Obtain turnover and profitability data to assess operational viability, since no turnover figures were disclosed in available accounts.
• Review cash flow forecasts and any business plans to understand how the company intends to address its negative net assets and liquidity shortfall.
• Confirm if there are any contingent liabilities or off-balance sheet obligations not reflected in the accounts.
• Assess the company’s client base, contracts, and market position in “Other engineering activities” (SIC 71129) to evaluate revenue prospects.