Company Number: 12699353

Analysis Date: 2025-07-20 16:15 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency concerns, with net current liabilities and net assets deeply negative and worsening year-on-year. The current liabilities far exceed current assets by a large margin, raising serious doubts about its ability to meet short-term obligations.

2. Key Concerns:

• Severe Negative Net Assets and Net Current Assets: The company’s net assets have deteriorated from -£245k in 2023 to -£527k in 2024, with net current liabilities increasing to over £750k against current assets of only £224k.
• High Trade Creditors Relative to Assets: Trade creditors alone increased dramatically to over £420k in 2024 from £16k the prior year, indicating possible cash flow stress or extended payment terms.
• Reliance on Group Undertakings and Intercompany Balances: Substantial amounts owed to group undertakings (£183k) suggest financial dependency on the parent or related companies, which may mask liquidity issues.

3. Positive Indicators:

• No Overdue Filings or Compliance Issues: The company is current with statutory filings, including accounts and confirmation statements, indicating regulatory compliance and good governance in reporting.
• Going Concern Statement Provided: Directors have assessed and concluded continuing as a going concern, which suggests internal confidence or external support despite financial strain.
• Stable Cash Position Year-on-Year: Cash balances remain around £96k-£99k, suggesting some liquidity buffer, albeit insufficient against liabilities.

4. Due Diligence Notes:

• Investigate Nature and Terms of Creditors: Detailed review of trade creditors and related party balances to understand maturity profiles, creditor relationships, and any concessions granted.
• Examine Revenue Streams and Profitability Trends: Limited financial data on income and expenses necessitates analysis of operational earnings, contract terms, and revenue reliability given the industry’s volatility.
• Assess Parent Company Support and Group Structure: Clarify the extent of financial and operational support from The Other Songs Limited and any guarantees or funding arrangements.
• Review Advances to Artists and Recoverability: Advances represent a significant portion of debtors and require scrutiny on collectability and impact on cash flow.
• Confirm No Director Remuneration and Management Structure: Directors currently receive no remuneration, which may impact operational sustainability and incentive structures.

Executive Summary:
Another Rhythm Limited demonstrates high financial risk due to substantial negative net assets and worsening liquidity, with current liabilities significantly exceeding current assets. While compliance and going concern assertions are positive, the company’s heavy creditor reliance and intercompany debts necessitate detailed due diligence to assess operational viability and group support. Careful scrutiny of creditor terms and revenue stability is crucial before considering investment exposure.