ASYLUM SOUND PRODUCTIONS LTD

Executive Summary

Asylum Sound Productions Ltd shows high financial risk characterized by persistent net liability positions and significant working capital deficits, raising concerns about its ability to meet obligations. While regulatory compliance and ongoing trading provide some reassurance, the company’s liquidity position and reliance on director loans warrant careful further investigation before considering investment.

ASYLUM SOUND PRODUCTIONS LTD - Analysis Report

Company Number: SC661179

Analysis Date: 2025-07-20 15:59 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits significant solvency and liquidity concerns, with negative net assets worsening over recent years and current liabilities substantially exceeding current assets, indicating an inability to meet short-term obligations without additional funding.

2. Key Concerns:

• Negative Net Assets and Shareholders' Funds: The company’s net assets have deteriorated from positive £8,408 in 2021 to negative £10,603 in 2024, signaling accumulated losses and a weakened financial position.
• Working Capital Deficit: Negative net current assets of £24,389 as of 2024 show current liabilities nearly five times the current assets, raising immediate liquidity risk.
• High Director’s Loan Account Liability: Creditors include a large director's loan account balance of £29,819, which may indicate reliance on director financing rather than sustainable operational cash flow.

3. Positive Indicators:

• Consistent Filing Compliance: Accounts and confirmation statements are filed timely with no overdue filings, indicating regulatory compliance and good governance practices in this regard.
• Ongoing Trading Status: The company remains active and has maintained operations since incorporation in 2020, suggesting some ongoing business activity within its niche industry classifications (sound recording, artistic creation).
• Low Employee Headcount: With only one employee (the director), fixed overheads may be relatively low, potentially reducing cash burn relative to larger companies.

4. Due Diligence Notes:

• Investigate the nature and terms of the director’s loan account, including repayment plans and whether it is being treated as a permanent capital injection or short-term liability.
• Review cash flow statements and management accounts beyond year-end to assess current liquidity and operating cash generation capacity.
• Examine turnover and profitability trends in detail, as turnover figures were not disclosed; clarify whether ongoing losses are due to start-up costs or declining revenues.
• Confirm if any contingent liabilities or creditor pressures exist that are not reflected in current filings.
• Assess sustainability of business model given negative equity and dependence on director funding.