Company Number: 12457632

Analysis Date: 2025-07-29 19:23 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits significant negative net current assets (working capital deficit) exceeding £85,000, indicating liquidity stress and difficulty meeting short-term obligations. Despite holding investment property valued at £150,000, current liabilities are very high relative to current assets. Additionally, director advances totaling over £85,000 raise concerns about reliance on insider funding.

2. Key Concerns:

• Liquidity Risk: Current liabilities (£87,441) vastly exceed current assets (£1,903), resulting in a large working capital deficit (-£85,538) that signals potential cash flow issues.
• Reliance on Director Loans: Directors' loans outstanding are substantial (£85,226) and have not materially reduced over the past year, suggesting dependency on these advances for liquidity support.
• Lack of Audited Financials & Limited Disclosure: The accounts are unaudited and exempt from audit, with no income statement provided, limiting insight into operational profitability and cash flows.

3. Positive Indicators:

• Investment Property Asset: The company holds investment property valued at £150,000, which supports the balance sheet and could be a source of future liquidity or collateral.
• No Overdue Filings: The company is up to date with accounts and confirmation statement filings, indicating regulatory compliance and governance discipline.
• Stable Net Assets: Shareholders’ funds have increased modestly from £50,276 in 2023 to £54,067 in 2024, suggesting some retained earnings or asset revaluation gains.

4. Due Diligence Notes:

• Investigate the nature and terms of the director loans, including repayment plans, interest rates, and security arrangements.
• Request detailed income statements and cash flow statements to assess operational performance and recurring profitability.
• Clarify if the investment property is generating rental income or other cash flows and confirm the valuation method and assumptions.
• Assess the company’s ability to reduce current liabilities or refinance short-term debts to improve liquidity.
• Review any contingent liabilities or off-balance sheet commitments not visible in the filings.