Company Number: 14026258

Analysis Date: 2025-07-29 14:45 UTC

1. Risk Rating: MEDIUM

Justification: Avalon Dogs Limited shows some improvement in net assets and profitability in the latest financial year but still exhibits liquidity constraints with net current liabilities and limited cash balances. The company is relatively new and small, with manageable operational scale, but working capital deficits and reliance on director loans indicate moderate financial risk.

2. Key Concerns:

• Liquidity Pressure: The company has negative net current assets (£-2,437 in 2024) and negligible cash (£5), implying potential difficulties meeting short-term obligations despite a recent improvement from prior years.
• Reliance on Director Loans: Significant director loan balances (£20,253 owed to Mrs. Snell) suggest external financing reliance rather than operational cash generation, posing risk if not repaid or converted.
• Limited Scale and Operating History: Incorporated in 2022 with only 2 employees, the company is still establishing its business, which may present operational and market risks not yet fully evident in the accounts.

3. Positive Indicators:

• Return to Profitability: After losses in the first year, the company reported a profit of £6,267 in 2024, strengthening shareholder equity to £4,749.
• Asset Base Growth: Tangible fixed assets increased with additions and controlled depreciation, showing investment in operational capacity.
• Compliance and Good Standing: Accounts and confirmation statements are filed timely and the company is active with no overdue filings or liquidation signs.

4. Due Diligence Notes:

• Review cash flow statements and operational cash generation to assess sustainability of working capital improvements.
• Investigate the nature, terms, and repayment plans of director loans to understand financial support and associated risks.
• Understand the business model and market position within the "Raising of other animals" SIC code to evaluate growth prospects and operational stability.
• Confirm that no undisclosed contingent liabilities or off-balance sheet obligations exist given the current liabilities and provisions.