Company Number: 14040950

Analysis Date: 2025-07-29 15:23 UTC

1. Risk Rating: MEDIUM
   The company exhibits a mixed financial position with a significant deterioration in liquidity over the latest financial year, raising concerns about short-term solvency. However, positive net assets and no overdue filings mitigate the risk to some extent.

2. Key Concerns:

• Negative Net Current Assets: As of 30 April 2024, current liabilities (£59,174) substantially exceed current assets (£15,523), resulting in a negative working capital of approximately £43,651. This signals potential liquidity stress and difficulty meeting short-term obligations.
• Rapid Deterioration in Liquidity: Compared to the prior year, current assets declined by over 50%, and current liabilities nearly tripled, indicating worsening cash flow or increased short-term debt that may impact operational stability.
• Concentration of Control: Two individuals, with one holding 75-100% voting rights and the other a significant shareholding, control the company. While common in small private firms, this concentration may raise governance concerns for investors seeking broader oversight.

3. Positive Indicators:

• Positive Net Assets: Despite liquidity challenges, net assets increased from £12,048 in 2023 to £42,020 in 2024, primarily due to the acquisition of fixed assets (£85,671), suggesting investment in longer-term operational capacity.
• No Overdue Filings: The company is current with both accounts and confirmation statement filings, indicating compliance with statutory requirements and regulatory governance.
• Small Employee Base: With only two employees on average, the company likely has controlled overhead costs, which may aid in managing financial pressures.

4. Due Diligence Notes:

• Investigate the nature and terms of the increased current liabilities to assess repayment obligations and potential restructuring needs.
• Review cash flow statements and bank statements to evaluate liquidity management and any reliance on director loans or external financing.
• Understand the business model and how the fixed assets acquired contribute to revenue generation and profitability.
• Assess the relationship and potential conflicts of interest given the concentrated ownership and director control.
• Confirm that no related party transactions or contingent liabilities exist which might not be apparent from the micro-entity accounts.