ALC MOTORS LTD
Executive Summary
A.L.C Motors Ltd demonstrates significant solvency and liquidity risks characterized by persistent negative net assets and substantial current liabilities exceeding current assets. While statutory compliance and transparent ownership are positive, the lack of operational scale and negative equity highlight concerns over financial stability and sustainability. Further due diligence is recommended to evaluate cash flows and business viability.
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This analysis is opinion only and should not be interpreted as financial advice.
ALC MOTORS LTD - Analysis Report
Risk Rating: HIGH
Justification: The company shows persistent and significant net liabilities with negative shareholders' funds (£-29,565 as of 31 March 2025), indicating solvency concerns. Current liabilities substantially exceed current assets leading to negative working capital, which poses liquidity risks. The absence of employees and minimal current assets suggest limited operational activity or scale.Key Concerns:
- Solvency Risk: Continued net liabilities and negative equity raise questions about the company’s ability to meet long-term obligations.
- Liquidity Concerns: Current assets (£148) are negligible compared to current liabilities (£29,713), indicating poor short-term liquidity and potential cash flow problems.
- Operational Stability: No employees and minimal assets imply limited operational capacity or revenue generation, which threatens sustainability.
- Positive Indicators:
- Compliance: The company is up to date with its statutory filings, including accounts and confirmation statements, with no overdue filings.
- Governance: Clear and current director and secretary appointments with identifiable persons controlling 25-50% shares each, suggesting transparency in ownership.
- Micro Entity Status: The company benefits from simplified reporting requirements, reducing administrative burden.
- Due Diligence Notes:
- Investigate the cause of sustained negative equity and whether there are plans or financial support to restore solvency.
- Review cash flow statements or bank statements (not provided) to assess actual liquidity and cash management.
- Clarify business activities given zero employees and minimal assets, including revenue generation and expenses.
- Confirm the absence of contingent liabilities or related party transactions that might affect financial stability.
- Assess the impact of being a newly incorporated entity (March 2023) on financial data and growth trajectory.
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