CDSILIGHTING LTD

Risk Rating: MEDIUM
The company displays strong short-term liquidity and a positive, growing net asset position. However, the absence of audited financial statements, concentrated ownership and control, and a material shift in trade creditor balances warrant a measured, medium-risk assessment.

Key Concerns

1. Data consistency and transparency
   The historical financial data contains anomalies: 2017 and 2018 show negative net assets but positive shareholders’ funds, and the reported “total assets” figure appears to reflect current assets only, excluding fixed assets. This limits the reliability of trend analysis and should be clarified with original filings.

2. Significant increase in trade creditors
   Trade creditors rose from £72,139 in 2024 to £137,357 in 2025, an increase of around 90%, even though cash also increased materially. This divergence may indicate stretched supplier payment terms, timing differences, or changes in purchasing behaviour. It is not necessarily adverse, but it requires explanation.

3. Working capital concentration
   Debtors of £209,994 and inventories of £104,443 together represent over half of total current assets. For a wholesale business, this creates exposure to customer default, slow collection, and inventory obsolescence. The company’s cash position is strong, but a large portion of its balance sheet remains dependent on the realisable value of these assets.

Positive Indicators

• Strong liquidity: Cash at bank of £254,358 exceeds total current liabilities of £252,923, giving a cash-to-liabilities ratio of approximately 1.0. The current ratio is approximately 2.25, and the quick ratio is approximately 1.84.
• Sound solvency position: Net assets have grown steadily from £270,613 in 2022 to £317,862 in 2025. There is no long-term debt, and the company’s equity base comfortably exceeds its total liabilities.
• Compliance is current: No overdue accounts or confirmation statement filings were identified. The company is entitled to audit exemption and has filed under the small companies regime, which is appropriate for its size.

Due Diligence Notes

• Obtain the profit and loss account and any management accounts to assess turnover, gross margins, and operating profitability, as these are not disclosed in the filed balance sheet.
• Request an aged debtors and creditors analysis to assess collection periods and payment behaviour.
• Clarify the nature of director loans: the balance fell from £34,803 to £5,516 during the year, indicating repayments. Confirm there are no adverse related-party arrangements.
• Investigate the 2017/2018 data discrepancies with Companies House records to ensure the historical trend is accurately understood.
• Review the company’s customer and supplier concentration, and consider sector conditions for wholesale office machinery and equipment.