Company Number: 13801316

Analysis Date: 2025-07-29 17:02 UTC

1. Risk Rating: MEDIUM

Justification: The company is relatively new (incorporated in late 2021) but shows growth in assets and net equity over two years. However, the large amount of long-term creditors (£330,000) compared with modest net assets (£34,996) and modest operating scale (micro entity) indicates potential solvency and liquidity risk if cash flows do not adequately cover debt servicing. The company is compliant with filings and not overdue, which supports regulatory stability.

2. Key Concerns:

• High level of long-term liabilities relative to net assets: £330k creditors due after one year against net assets of only £35k may pressure solvency if earnings or cash flow deteriorate.
• Modest net equity and small scale: The company’s net assets remain low despite growth, limiting financial buffer for downturns or unexpected expenses.
• Limited operational history and scale: Being a micro-entity with only 2 employees and short trading history increases uncertainty about sustainable cash flow generation and operational resilience.

3. Positive Indicators:

• Growth in total assets and net equity: Net assets increased from £8,544 in 2022 to £34,996 in 2023, indicating some strengthening of the balance sheet.
• Positive net current assets: A strong working capital position (£331,156) suggests good short-term liquidity to cover current liabilities.
• Up-to-date statutory filings: Accounts and confirmation statements are current, indicating compliance with regulatory requirements.

4. Due Diligence Notes:

• Investigate the nature and terms of the £330,000 long-term creditors: origin, repayment schedule, interest rates, and covenants.
• Review cash flow statements and profit & loss accounts (not provided) to assess operational profitability and cash generation.
• Understand business model sustainability and client base given the management consultancy SIC code and micro scale.
• Verify directors’ plans for managing debt and growth, given the relatively low equity base.
• Confirm no undisclosed contingent liabilities or related party transactions that could affect solvency.