Company Number: SC733320

Analysis Date: 2025-07-20 15:46 UTC

1. Risk Rating: HIGH
   The company shows negative net current assets and negative total net assets, indicating potential solvency and liquidity issues despite being a micro-entity with limited scale.

2. Key Concerns:

• Negative net current assets of £27,659 as of 31 May 2024, worsening from £24,840 the prior year, suggest the company cannot cover short-term liabilities with current assets, a liquidity red flag.
• Negative net assets (£18,932) and shareholders’ funds indicate that total liabilities exceed total assets, pointing to potential insolvency risk.
• The company has been operating with very limited fixed assets and low employee count (2 employees), raising questions about operational scale and business sustainability in a competitive automotive maintenance and used vehicle sales sector.

3. Positive Indicators:

• The company is current with its statutory filings (accounts and confirmation statements not overdue), showing compliance with Companies House requirements.
• The business has increased current assets from £8,457 to £21,950 over the year, reflecting some growth in liquid resources despite overall negative working capital.
• Directors have signed off on the accounts and confirmed preparation under appropriate financial reporting standards (FRS 105), indicating governance awareness.

4. Due Diligence Notes:

• Investigate the nature and timing of current liabilities to assess if short-term obligations can be renegotiated or extended to improve liquidity.
• Review cash flow statements and profit & loss trends (not available here) to understand operational cash generation and sustainability.
• Assess the business model viability given limited asset base and negative net worth, including customer base, contracts, and competitive positioning.
• Confirm no director disqualifications or regulatory issues beyond the filings provided.
• Understand if any related party loans or capital injections are planned or have occurred post-reporting date to support solvency.