Company Number: SC677221

Analysis Date: 2025-07-29 20:21 UTC

1. Risk Rating: HIGH
   The company demonstrates persistent net liabilities and negative working capital over multiple years, indicating significant solvency and liquidity concerns.

2. Key Concerns:

• Negative Net Assets and Shareholders' Funds: The company reported a net liability of £2,882 as of 31 October 2023, worsening from prior years (£606 negative in 2022), signaling erosion of equity and potential insolvency risk.
• Poor Liquidity Position: Current liabilities (£4,565) substantially exceed current assets (£1,156), resulting in a net current liability of £3,409 as of 2023, which raises immediate concerns about the company’s ability to meet short-term obligations.
• Lack of Financial Buffer and Capital: The company’s share capital is minimal (£100), and accumulated losses reflected in the negative reserves may limit its capacity to raise further funds or weather financial stress.

3. Positive Indicators:

• Timely Filing Compliance: The company is up to date with both its accounts and confirmation statement filings, indicating adherence to regulatory requirements without overdue filings.
• Stable Operational Scale: The average number of employees remained steady at 3 over recent years, which may reflect controlled cost structure and operational consistency.
• Micro Entity Status: As a micro-entity, the company benefits from simplified reporting requirements, reducing administrative burden and costs.

4. Due Diligence Notes:

• Investigate the reasons for persistent and increasing net liabilities to understand if losses stem from operational inefficiencies, competitive pressures, or other factors.
• Examine cash flow statements and creditor payment history to assess liquidity management and risk of supplier or creditor disputes.
• Review director’s plans or actions to address negative equity and liquidity issues, including any capital injections, restructuring, or refinancing efforts.
• Confirm the absence of any director disqualifications or regulatory warnings that might impact governance or business continuity.
• Assess the market position and viability of the company’s operating segment (take-away food shops) in its geographic area, particularly post-pandemic recovery status.