Company Number: 12642959

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

1. Risk Rating: MEDIUM
   The company shows a recent significant deterioration in liquidity and working capital, with net current liabilities of £33,986 as of June 2024 compared to net current assets of £45,601 the prior year. Although net assets remain positive at £24,906, the sharp increase in short-term liabilities raises concern about near-term solvency and cash flow management.

2. Key Concerns:

• Liquidity deterioration: Current liabilities increased from £25,778 in 2023 to £81,013 in 2024, driven largely by a £61,794 director's loan account balance classified as a current liability, which may indicate reliance on director funding or short-term loans.
• Working capital deficit: Negative net current assets of nearly £34k suggest potential difficulties in meeting short-term obligations from liquid resources.
• Sharp increase in fixed assets: Tangible fixed assets jumped from £5,360 in 2023 to £58,892 in 2024 primarily due to motor vehicle additions (£64,950 cost), possibly affecting cash flow and indicating capital expenditure that needs further scrutiny regarding funding and necessity.

3. Positive Indicators:

• Positive net assets and shareholders’ funds (£24,906), indicating the company remains solvent on a balance sheet basis despite liquidity issues.
• No overdue filings or compliance issues, with accounts and confirmation statements up to date, reflecting good regulatory adherence.
• Stable director presence since incorporation, which may support operational continuity.

4. Due Diligence Notes:

• Investigate the nature, terms, and repayment plans for the director's loan account, as its large balance is a material factor in current liabilities and liquidity risk.
• Review cash flow forecasts and bank statements to assess the company’s ability to manage its working capital deficit and meet upcoming obligations.
• Evaluate the strategic rationale and financing arrangements behind the significant fixed asset purchases, especially the motor vehicle acquisition, to understand impact on operational stability and cash requirements.
• Confirm whether any contingent liabilities or off-balance sheet commitments exist that may exacerbate financial risks.