Company Number: 13984986

Analysis Date: 2025-07-20 13:10 UTC

1. Risk Rating: LOW to MEDIUM
   Arcadia Spa Limited demonstrates improving financial health with positive net assets and working capital as of the latest reporting period. The company is current on filings and appears compliant. However, as a micro-entity with limited historical data and director loans on the balance sheet, some caution is warranted until operational stability is further evidenced.

2. Key Concerns:

• Director Loans: Significant unsecured, interest-free loans from the director (£16,283 as at 31/03/2024) represent related party exposure and potential dependency on director funding for liquidity.
• Limited Operating History: Incorporated in 2022, the company has less than two full years of financial history, limiting trend analysis and risk forecasting.
• Modest Asset Base: Fixed assets are minimal (£4,449), which is typical for a service business but could constrain collateral availability for external financing.

3. Positive Indicators:

• Improved Financial Position: Net assets increased from £364 in 2023 to £10,655 in 2024, driven by stronger current assets and improved working capital (£8,371 positive in 2024 vs. negative in 2023).
• Current on Filings: No overdue accounts or confirmation statements indicate good compliance and governance practices.
• Sufficient Working Capital: Current assets comfortably exceed current liabilities, suggesting reasonable short-term liquidity to meet obligations.

4. Due Diligence Notes:

• Review Director Loan Terms and Repayment Plans: Understand the sustainability and impact of director loans on cash flow and financial independence.
• Assess Revenue and Profitability Trends: Gain access to management accounts or additional data to verify operational cash generation and growth trajectory.
• Confirm Operational Capacity: Validate the business model and client base in the hairdressing and beauty treatment sector to assess sustainability beyond startup phase.