AMANDA ALDER DANCE ACADEMY LIMITED

Risk Rating: LOW The company demonstrates strong financial stability characterized by consistent asset growth, a healthy liquidity position, and full compliance with statutory filing requirements. The business has successfully accumulated retained earnings over its 14-year history, moving from net assets of £9,026 in 2018 to £42,620 in 2025. While micro-entity filings limit transparency, the visible balance sheet metrics indicate a solvent and financially sound enterprise.

Key Concerns: - Key Person Dependency: The company is heavily reliant on its sole director and PSC, Amanda Jayne Isard, with only two average employees. In service-based businesses like dance academies, the inability of the principal director to work (due to illness or injury) could immediately halt revenue generation while fixed and contractual obligations remain. - Significant Deferred Income Liability: Accruals and deferred income have risen sharply from £36,548 in 2024 to £55,633 in 2025. While common in businesses collecting upfront fees for future classes, this represents a substantial future obligation. If the company cannot deliver these services, refund liabilities could quickly erode the cash buffer. - Limited Financial Transparency: As a micro-entity, the company files filleted accounts, meaning the Profit & Loss account is withheld from the public register. This makes it impossible to assess revenue trends, profit margins, and the exact relationship between deferred income and current-year trading.

Positive Indicators: - Robust Liquidity Position: Current assets (£120,183) significantly exceed current liabilities (£23,719), resulting in net current assets of £96,641. This provides a substantial working capital buffer and suggests the company is well-positioned to meet its short-term debts. - Consistent Asset Growth: Total assets have grown steadily from £22,053 in 2018 to £121,795 in 2025. This trajectory indicates successful business scaling, accumulation of cash reserves, and a sustainable operational model. - Strong Regulatory Compliance: The company status is Active, and both annual accounts and confirmation statements are up to date with no overdue filings. This indicates disciplined governance and administration.

Due Diligence Notes: - Composition of Current Assets: Investigate the breakdown of the £120,183 in current assets. Given the nature of the business, it is highly likely to be cash, but confirming the proportion of cash versus trade debtors is crucial for assessing true liquidity. - Deferred Income Terms: Further inquiry is needed into the terms of the deferred income. Understanding the refund policy and the timeline for service delivery will clarify the actual risk this liability poses to future cash flows. - Key Person Insurance: Verify whether the company maintains key person insurance or has operational contingency plans to mitigate the financial risk associated with the director's potential absence.