Company Number: 13063857

Analysis Date: 2025-07-20 18:05 UTC

1. Risk Rating: MEDIUM

Justification: The company holds substantial investment property assets (£99,224) and positive net assets (£7,997 as at 31 Dec 2023), which is a favorable indicator of solvency. However, it consistently reports negative net current assets (working capital deficits) and significant long-term creditors exceeding £89,000, including a related party creditor to the director, which signals potential liquidity constraints and reliance on director funding.

2. Key Concerns:

• Negative Net Current Assets: The company’s current liabilities exceed current assets by £1,783 in 2023, indicating potential short-term liquidity pressure.
• Significant Long-Term Related Party Debt: Over £89,000 is owed to the director as a creditor, suggesting dependence on director financing rather than external funding or operating cash flows.
• Limited Operational Data: The company reports rental income but does not disclose turnover or profit and loss accounts (exempt under small company rules), limiting insight into operational profitability and cash flow sustainability.

3. Positive Indicators:

• Asset Backing: The company’s investment property valued at £99,224 remains stable year on year, providing a tangible asset base.
• Gradual Equity Growth: Shareholders’ funds increased from £4,556 in 2022 to £7,997 in 2023, indicating some retention of earnings or asset revaluation gains.
• Compliance with Filings: Accounts and confirmation statements are filed on time without overdue status, indicating good regulatory compliance.

4. Due Diligence Notes:

• Investigate the terms and enforceability of the director-related party loan, including repayment schedule and interest arrangements.
• Obtain or request management accounts or cash flow statements to assess operational cash generation, as statutory filings do not include profit and loss details.
• Confirm valuation methodology and market conditions underlying investment property valuation to ascertain asset liquidity and true realizable value.
• Review any contingent liabilities or off-balance-sheet commitments that may impact solvency or liquidity not evident from the balance sheet.