Company Number: 13123704

Analysis Date: 2025-07-20 11:44 UTC

1. Risk Rating: HIGH
   Justification: The company reports negative net assets and shareholders' funds (£-2,688 in 2024, improved from £-4,067 in 2023), indicating a deficit in equity. Long-term liabilities (Director’s Loan Account) amount to £37,000, exceeding current assets. Cash balance is low at £3,162, and current liabilities of £3,584 exceed cash significantly, presenting liquidity concerns. The company has operated at a loss historically and is reliant on director loans for financing, which raises solvency risk.

2. Key Concerns:

• Negative equity position with persistent net liabilities, challenging long-term solvency.
• Reliance on director’s loan account (£37,000) to finance operations suggests limited external funding and potential pressure on cash flow if director support is withdrawn.
• Low cash reserves relative to current liabilities, indicating potential liquidity stress and difficulty meeting short-term obligations.

3. Positive Indicators:

• Current assets have increased notably from £14,081 in 2023 to £27,656 in 2024, showing some growth in working capital.
• Net current assets improved from £12,331 to £24,072, indicating better short-term asset coverage of current liabilities.
• The company is compliant with filing deadlines for accounts and confirmation statements, reflecting good regulatory discipline.

4. Due Diligence Notes:

• Investigate the nature and terms of the director’s loan account, including repayment schedule and whether it is unsecured or subordinated.
• Review the company’s revenue trends, profitability drivers, and business plan to assess sustainability and potential to return to positive equity.
• Examine cash flow statements and debtor/stock turnover to evaluate liquidity management and operational efficiency.
• Confirm no undisclosed contingent liabilities or overdue payments that could exacerbate financial stress.
• Assess director’s backgrounds for any prior financial difficulties or regulatory issues, although none are apparent from current data.