ZERO BINARY LIMITED

Executive Summary

ZERO BINARY LIMITED has demonstrated a notable financial recovery in the latest year, moving from prior negative equity to a positive net asset position, suggesting reduced solvency risk. The company maintains up-to-date statutory filings and operates in a viable software development sector. However, limited cash reserves and concentrated control warrant further review of cash flow stability and governance practices to ensure ongoing operational resilience.

ZERO BINARY LIMITED - Analysis Report

Company Number: 12778855

Analysis Date: 2025-07-20 14:41 UTC

1. Risk Rating: LOW to MEDIUM
   Justification: ZERO BINARY LIMITED shows a strong turnaround in its latest financial year, moving from negative net assets (£-6,503 in 2023) to positive net assets (£21,786 in 2024). The company maintains positive net current assets (£18,889) and a modest cash balance (£5,429), indicating improved solvency and liquidity. However, the small share capital (£1) and relatively low cash reserves suggest limited buffer against financial shocks.

2. Key Concerns:

   • Historical Losses and Past Insolvency: The company reported negative net assets and shareholders' funds in prior years (2021-2023), indicating it was previously insolvent or near insolvency. This history may imply operational or financial challenges that needed resolution.
   • Low Cash Reserves: Despite positive net current assets, cash on hand is only £5,429, which may constrain the company’s ability to meet unexpected short-term obligations or invest in growth without additional financing.
   • Single Director and Control Concentration: Mr. Matthew Stephen Martin is the sole director and 75-100% shareholder, concentrating control and decision-making. This could pose governance risks and reliance on one individual’s management capabilities.

3. Positive Indicators:

   • Substantial Improvement in Financial Position: The company moved from negative equity to positive equity within one year, reflecting improved profitability or capital injections.
   • No Overdue Filings and Compliance: All accounts and confirmation statements are up to date, showing good compliance with statutory requirements and governance standards.
   • Active Online Presence and Industry Focus: The company operates in business and domestic software development (SIC 62012) with an active website, suggesting ongoing operational activity and market engagement.
   • Small Number of Employees: With only two employees on average, the company likely has a low fixed cost base, aiding operational flexibility.

4. Due Diligence Notes:

   • Investigate the Source of the Equity Improvement: Review whether the positive net assets in 2024 arise from improved trading profits, capital injections, or debt restructuring.
   • Assess Cash Flow Trends and Forecasts: Given the small cash balance, obtain cash flow statements or management forecasts to evaluate liquidity sustainability.
   • Review Director’s Background and Governance Practices: Confirm absence of any disqualifications or adverse conduct and assess the robustness of internal controls given the single-director structure.
   • Examine Debtors Aging and Credit Risk: Since debtors (£47,259) form a significant part of current assets, verify their collectability and potential impact on liquidity.
   • Confirm No Contingent Liabilities or Off-Balance Sheet Risks: Seek disclosures or inquiries about any contingent liabilities or guarantees that could affect solvency.