Company Number: 12684682

Analysis Date: 2025-07-20 15:58 UTC

1. Risk Rating: MEDIUM
   ATC Training Limited demonstrates a positive net asset position and growing current assets, but a marked increase in both short-term and long-term liabilities within the latest financial year raises moderate solvency concerns.

2. Key Concerns:

• Rising Debt Levels: The company’s current liabilities increased sharply from £8,402 in 2023 to £37,273 in 2024, and it has also taken on significant long-term bank loans (£38,114) as of 2024. This leverage could strain cash flows if revenue growth does not keep pace.
• Director Loans and Related Party Exposure: Loans from directors rose from £312 to £5,520, indicating reliance on insider funding which may signal underlying liquidity pressures.
• Profitability and Reserves: Although shareholders’ funds remain positive at circa £25k, the profit and loss reserve decreased slightly, suggesting limited retained earnings growth and possibly thin operational margins.

3. Positive Indicators:

• Strong Working Capital Position: Net current assets improved substantially to £54,824 in 2024, supported by increased cash balances (£63,613) and trade debtors, indicating improved short-term liquidity.
• Consistent Asset Growth: Fixed assets nearly doubled from £6,123 to £8,173, reflecting ongoing investment in tangible assets supporting operations.
• Timely Filing and Compliance: The company is up to date with statutory accounts and confirmation statements, with no overdue filings or audit requirements, indicating sound regulatory compliance.

4. Due Diligence Notes:

• Review the terms and repayment schedule of the bank loans, both current and long-term, to assess debt servicing capacity and covenant compliance.
• Examine cash flow statements and profit and loss accounts (not provided) to evaluate operational cash generation and profitability trends.
• Investigate the nature and conditions of director loans to understand any contingent liabilities or repayment risks.
• Confirm the sustainability of revenue streams, particularly given the modest equity base and reliance on external financing.
• Assess management capability and governance, noting that one director resigned recently and the remaining director holds majority control.