AL-MADINA GROCERY & CAFFE SHOP LTD

Executive Summary

The financial data for AL-MADINA GROCERY & CAFFE SHOP LTD indicates a high risk profile mainly due to its negative net asset position and worsening liquidity. While statutory compliance is maintained and ownership is consolidated, operational scale and financial stability remain significant concerns. Further detailed financial and operational due diligence is recommended before investment.

AL-MADINA GROCERY & CAFFE SHOP LTD - Analysis Report

Company Number: 13756741

Analysis Date: 2025-07-29 20:17 UTC

1. Risk Rating: HIGH

Justification: The company’s financials as of 30 November 2023 reveal significant negative net current assets (£-43,082) and negative net assets (£-39,526), indicating a net liability position. This suggests the company’s current liabilities substantially exceed its current assets, posing a solvency risk. The worsening trend from the previous year’s negative net current assets (£-12,396) and net assets (£-12,396) further exacerbates concerns about financial stability.

2. Key Concerns:

• Solvency and Liquidity Risk: The company’s current liabilities have nearly doubled since last year, while current assets have decreased, resulting in a sharply negative working capital. This raises doubts about the company’s ability to meet short-term obligations.
• Operating Sustainability: Despite being active, the company remains a micro-entity with minimal asset base (fixed assets £3,556) and employs only one person, suggesting limited operational scale. The continuous negative net asset position signals ongoing losses or financial stress.
• Governance and Management Changes: The company has experienced multiple director changes within a short period, including a recent change as of February 2025. Frequent turnover in leadership can affect strategic continuity and operational stability.

3. Positive Indicators:

• No Overdue Filings: The company’s accounts and confirmation statements are up to date, with no overdue filings, indicating compliance with statutory requirements.
• Clear Ownership Structure: A single individual, Mr Sarwar Islam, holds majority control (75-100%) and is also the current director, which can facilitate decisive management actions.
• Micro-entity Status: The company benefits from simplified filing and accounting requirements, easing administrative burdens.

4. Due Diligence Notes:

• Obtain detailed profit and loss accounts to assess income generation, profitability trends, and cash flow dynamics.
• Investigate the nature and causes of the growing current liabilities to determine if they relate to trade creditors, loans, or other obligations.
• Clarify the company’s business model and revenue streams given the SIC code (47990) and micro size, to evaluate operational viability.
• Review reasons for frequent director resignations and appointments to assess management stability and governance quality.
• Examine any contingent liabilities or off-balance sheet obligations that could further impact solvency.