ADAM2ADAM GARAGE LTD

Executive Summary

Adam2Adam Garage Ltd, a micro private company engaged in motor vehicle maintenance and used car sales, exhibits high financial risk due to persistent negative net current assets and overall negative net worth, indicating potential solvency and liquidity pressures. While statutory compliance appears satisfactory, the business’s operational scale and financial structure warrant careful scrutiny, particularly regarding its ability to meet short-term liabilities and sustain operations. Further detailed financial and operational due diligence is recommended before considering investment exposure.

ADAM2ADAM GARAGE LTD - Analysis Report

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.