Company Number: 12927227

Analysis Date: 2025-07-29 12:51 UTC

1. Risk Rating: HIGH
   Justification: The company’s latest financials show negative net current assets and net liabilities of £9,242 as of 31 October 2024, a significant deterioration from prior years. This indicates potential solvency issues and inability to cover short-term obligations from current assets.

2. Key Concerns:

• Solvency and Liquidity: Negative net current assets and net liabilities suggest the company may struggle to meet immediate creditor demands or operational expenses without additional financing.
• Rapid Financial Deterioration: The company moved from positive net assets (£299 in 2023) to negative net assets (-£9,242 in 2024) within one year, raising concerns about the sustainability of its business model or financial management.
• Limited Financial Disclosure: As a micro-entity, financial reporting is minimal, restricting insight into profit/loss, cash flows, or contingencies that could further clarify financial health.

3. Positive Indicators:

• Compliance and Filing: The company is current with both accounts and confirmation statement filings, reflecting good regulatory compliance and governance practices.
• Stable Employment: Maintained an average of two employees over the past two years, indicating some operational continuity despite financial strain.
• No Indication of Insolvency Proceedings: Company status is active with no liquidation or administration filings, suggesting ongoing business operations.

4. Due Diligence Notes:

• Investigate the reasons behind the sharp decline in net assets between 2023 and 2024, including any extraordinary expenses, losses, or write-downs.
• Review cash flow statements and profitability metrics (not available in micro-entity filings) to assess operational cash generation and sustainability.
• Confirm whether there are any contingent liabilities, related party transactions, or off-balance sheet commitments that could exacerbate financial stress.
• Verify the background and financial standing of the sole director, including any previous directorships or involvement in financially distressed entities.