Company Number: 12641679

Analysis Date: 2025-07-20 16:18 UTC

1. Risk Rating: MEDIUM
   The company shows positive net assets and current assets exceeding current liabilities, indicating solvency. However, the sharp increase in current liabilities (especially corporation tax) and concentration of control with a single director present moderate liquidity and operational risks.

2. Key Concerns:

• Significant increase in corporation tax payable from £4,749 to £27,733 within one year, which may indicate recent profitability or deferred tax obligations requiring cash outflow.
• High reliance on a single director and lack of broader governance structure may pose operational continuity and compliance risks.
• Absence of audit and limited disclosure (small company exemption) restricts transparency, potentially concealing underlying financial or operational issues.

3. Positive Indicators:

• Consistent growth in net assets from £29,882 in 2023 to £50,185 in 2024, suggesting profitability or retained earnings accumulation.
• Healthy net current assets (£49,460) and strong cash position (£38,921) relative to current liabilities, supporting ability to meet short-term obligations.
• Up-to-date filings with Companies House, no overdue accounts or confirmation statement, indicating compliance with statutory requirements.

4. Due Diligence Notes:

• Investigate nature and timing of corporation tax liability increase to assess cash flow impact and potential tax planning issues.
• Review contracts and receivables underlying the significant increase in debtors (£4,952 to £42,574) to confirm collectability and revenue recognition policies.
• Assess director’s background and governance practices given sole director status to evaluate management stability and oversight.
• Confirm absence of contingent liabilities or off-balance sheet risks not disclosed in the accounts.