Company Number: 12693254

Analysis Date: 2025-07-20 13:20 UTC

1. Risk Rating: MEDIUM
   AR Convenience Retail Ltd demonstrates ongoing trading activity with net assets of £14,189 as of June 2024 and no overdue filings, indicating basic compliance and operational continuity. However, a notable increase in current liabilities and the introduction of long-term finance lease obligations raise concerns about solvency and liquidity pressures.

2. Key Concerns:

• Rising Current Liabilities: Current liabilities have more than tripled from £26,371 in 2023 to £86,386 in 2024, driven by increased accruals and bank loans, which may indicate cash flow stress.
• New Long-term Debt: The company has taken on £23,548 in finance lease obligations in 2024, adding to fixed financial commitments and potentially impacting solvency.
• Declining Net Assets: Net assets decreased from £21,169 in 2023 to £14,189 in 2024, reflecting a reduction in retained earnings and potential erosion of equity buffer.

3. Positive Indicators:

• Positive Net Current Assets: Despite the increase in liabilities, net current assets remain positive at £8,796, suggesting short-term obligations are still covered by current assets.
• Cash Position Improved: Cash at bank increased substantially from £10,125 to £37,532, indicating improved liquidity or cash management during the year.
• Consistent Filings and Compliance: Accounts and confirmation statements are up to date with no overdue filings, reflecting satisfactory regulatory compliance.

4. Due Diligence Notes:

• Investigate the nature and terms of the bank loans and finance leases to assess repayment schedules and covenant risks.
• Review cash flow statements and profit and loss accounts (not provided) to understand operational profitability and cash generation trends.
• Examine the reasons for the large increase in accruals (£22,880 in 2024 vs. £630 in 2023) to identify any contingent liabilities or deferred expenses.
• Confirm the status and terms of director loans (£10,488 in 2024) and assess potential related party risks.
• Verify if the company has any contingent liabilities or off-balance sheet commitments not disclosed in the available accounts.