Company Number: 12784972

Analysis Date: 2025-07-19 12:25 UTC

1. Risk Rating: HIGH
   The company exhibits a high risk profile primarily due to its extremely tight working capital position and near-zero net assets. The balance sheet reveals that current liabilities nearly equal current assets, leaving negligible buffer to meet short-term obligations. Additionally, the substantial director’s loan account classified as a creditor raises concerns about reliance on related party funding rather than third-party financing.

2. Key Concerns:

• Liquidity Pressure: Current assets (£1,355,924) just barely cover current liabilities (£1,355,844), resulting in net current assets of only £80. This minimal working capital leaves no margin for operational disruptions or unexpected expenses.
• Reliance on Director’s Loan: A significant portion of current liabilities (£1,354,845) is a director’s loan, indicating dependence on insider funding which may not be sustainable or readily convertible to cash if needed.
• Minimal Equity and Net Assets: Shareholders’ funds stand at only £80, with total net assets also at £80, suggesting very limited equity cushion to absorb losses or support growth.

3. Positive Indicators:

• No Overdue Filings: The company is current on statutory filings with no overdue accounts or confirmation statements, implying compliance with regulatory requirements.
• Increasing Cash Position: Cash at bank nearly doubled from £400,500 in 2022 to £840,000 in 2023, indicating improved cash holdings despite tight working capital overall.
• Active Status and Ongoing Operations: The company remains active with a consistent director since incorporation and a stable small workforce (2 employees).

4. Due Diligence Notes:

• Investigate the terms, repayment schedule, and security of the director’s loan account to assess the risk of sudden calls on liquidity or withdrawal of funding.
• Review detailed cash flow statements and management accounts to understand underlying cash generation and operational sustainability beyond balance sheet snapshots.
• Clarify the nature and realizability of work in progress stock valued at £515,924 to confirm it can be converted to cash in the short term.
• Examine any contingent liabilities or off-balance-sheet risks that may impact solvency.
• Assess the company’s business model and revenue streams within the management consultancy sector (SIC 70229) for resilience and growth potential.