Company Number: SC765200

Analysis Date: 2025-07-20 12:51 UTC

1. Risk Rating: MEDIUM
   The company A. Irwin Accountancy Ltd, incorporated in 2023, shows a positive net asset position (£42,860) but has a negative net current asset position (-£40,359), indicating potential short-term liquidity constraints. The presence of non-current liabilities (£32,233) further stresses the balance sheet. Given its recent establishment and limited financial history, the risk of solvency and liquidity issues is moderate but not immediately critical.

2. Key Concerns:

• Negative Working Capital: Current liabilities (£113,676) exceed current assets (£73,317), creating a net current liability position of -£40,359, which could impair the company’s ability to meet short-term obligations promptly.
• Significant Loan Liabilities: Non-current loan liabilities of £32,233 increase financial leverage and future cash flow commitments, which may strain resources if revenue generation is insufficient.
• Limited Share Capital and Equity Base: With only £2 in share capital and relatively modest shareholder funds (£42,860), the company has a thin capital buffer to absorb losses or fund growth without external financing.

3. Positive Indicators:

• Positive Net Assets: Despite short-term liquidity issues, net assets remain positive at £42,860, reflecting that total assets exceed total liabilities.
• Cash Holdings Equal to Current Assets: The current assets are entirely cash (£73,317), indicating no reliance on receivables or inventory, which provides immediate liquidity if managed carefully.
• No Overdue Filings or Regulatory Issues: All statutory filings, including accounts and confirmation statements, are up to date, indicating good compliance and governance practices.
• Single Director and PSC: The sole director, Amy Irwin, also holds 75-100% ownership and control, which could allow for swift decision-making and operational agility at this stage.

4. Due Diligence Notes:

• Investigate the nature and terms of the "Other creditors" amounting to £91,388 within current liabilities to assess urgency and risk profile of these payables.
• Review cash flow forecasts and management plans addressing the negative working capital to understand how short-term liquidity needs will be met.
• Examine loan agreements for the £32,233 non-current loan to understand repayment schedules, interest rates, and covenants.
• Assess the business model viability and revenue projections given the company's early stage and significant intangible assets (goodwill £87,279).
• Confirm whether the intangible asset representing goodwill was acquired through a business combination and evaluate its recoverability.
• Verify any contingent liabilities or off-balance sheet commitments that may affect future solvency.