ART-K SOUTH EALING LTD

Executive Summary

ART-K SOUTH EALING LTD is a micro-entity private company showing sound compliance and operational stability but exhibiting a concerning decline in liquidity and net assets in its latest financial year. The sharp increase in current liabilities and minimal equity cushion elevate solvency risk, warranting further investigation into short-term obligations and related-party exposures. Continued monitoring and deeper financial review are advised before considering investment.

ART-K SOUTH EALING LTD - Analysis Report

Company Number: 13918582

Analysis Date: 2025-07-29 12:17 UTC

1. Risk Rating: MEDIUM
   Despite the company being active and compliant with filing requirements, recent financial data reveals a significant deterioration in liquidity and net assets, indicating moderate solvency and liquidity risks at this stage.

2. Key Concerns:

• Deteriorating Liquidity Position: The current liabilities have surged from £1,036 in 2023 to £31,587 in 2024, while current assets increased only modestly, resulting in negative net current assets of £6,637 in 2024 compared to positive £13,411 in 2023. This raises concerns about the company’s ability to meet short-term obligations.
• Minimal Net Assets and Equity: Net assets have declined sharply from £1,713 in 2023 to a marginal £268 in 2024, indicating a weakened capital base and potential erosion of shareholder funds.
• Concentration of Control and Related-party Risk: The sole person with significant control is Art-K Ltd, owning 75-100% shares and voting rights, suggesting potential related party transactions or operational dependencies that require scrutiny.

3. Positive Indicators:

• Timely Filing and Compliance: The company’s accounts and confirmation statements are up to date with no overdue filings, indicating good regulatory compliance and governance practices.
• Stable Operational Footprint: The company maintains a small headcount (3 employees) consistent over two years, reflecting operational stability and controlled overheads.
• Tangible Fixed Assets Base: The company holds tangible fixed assets valued at approximately £6,905 in 2024, providing some asset backing.

4. Due Diligence Notes:

• Investigate the nature and cause of the significant increase in current liabilities in the 2024 financial year, including any short-term borrowing, trade creditors, or accruals.
• Review cash flow statements and management accounts (if available) to assess ongoing liquidity and cash burn rates.
• Examine any related-party transactions with Art-K Ltd or other entities under common control to understand financial and operational dependencies.
• Confirm the business model sustainability given the micro-entity scale, and whether there are plans or actions to strengthen the balance sheet.
• Assess any contingent liabilities or off-balance sheet commitments that may impact solvency.