A & S DIRECT LTD

Executive Summary

A & S Direct Ltd shows significant liquidity risk with current liabilities greatly exceeding current assets and large outstanding director loans. While the investment property strengthens the balance sheet and filings are up to date, the absence of audited financials and income data limit clarity on operational sustainability. Further due diligence on cash flow, director loan terms, and property income is recommended before investment consideration.

A & S DIRECT LTD - Analysis Report

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.