A H M LOCUMS LIMITED

Executive Summary

A H M LOCUMS LIMITED exhibits significant financial deterioration within two years of incorporation, moving from marginally positive net assets to net liabilities, coupled with a severe liquidity shortfall. While statutory filings are up to date and the company remains active, the financial position raises substantial concerns about solvency and operational viability. Further detailed inquiry into the company’s cash flows, liabilities, and related party transactions is strongly recommended before considering any investment.

A H M LOCUMS LIMITED - Analysis Report

Company Number: 13834089

Analysis Date: 2025-07-20 14:17 UTC

1. Risk Rating: HIGH
   The company’s financials show a deterioration from a small positive net asset position (£1) in 2023 to a significant net liability position (£-445) in 2024, indicating solvency concerns. The current assets have collapsed to £1 against current liabilities of £86, implying severe liquidity constraints. The micro-entity status limits disclosure, but the available data suggest operational and financial instability.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Funds: The balance sheet shows net liabilities of £445 as of January 2024, raising questions about the company’s ability to meet long-term obligations.
• Severe Working Capital Deficit: Current liabilities exceed current assets by £85, indicating potential cash flow difficulties to cover short-term debts.
• Director’s Loan Account Fluctuations: The director’s loan account has moved from a positive balance (creditor to company) of £739 in 2023 to a negative balance (company owes director) of £45 in 2024, reflecting potentially irregular cash movements and reliance on director funding.

3. Positive Indicators:

• No Overdue Filings: Both accounts and confirmation statements are filed on time, suggesting compliance with statutory requirements and no immediate governance red flags.
• Active Status and No Liquidation: The company remains active with no indication of insolvency proceedings.
• Single Shareholder and Director: Clear control by one individual (Mr Adam Husam Malik) may facilitate swift decision-making.

4. Due Diligence Notes:

• Investigate the reason behind the sharp decline in current assets from £740 to £1 within one year and the cause of the negative net asset position.
• Review the composition of current liabilities and accruals (£360) to understand upcoming payment obligations and potential contingent liabilities.
• Scrutinize director’s loan account transactions and their impact on liquidity and solvency. Confirm if the director’s advances are informal funding or formalized with appropriate documentation.
• Assess operational performance and cash flow generation given the company’s classification in general medical practice activities (SIC 86210) to determine business sustainability.
• Verify if there are any unreported related party transactions or contingent liabilities not visible in micro-entity accounts.