AYAN RETAILS LTD

Executive Summary

Ayan Retails Ltd currently faces high financial risk due to persistent negative equity and reliance on director loans, coupled with very low cash reserves relative to liabilities. While regulatory compliance and slight working capital improvement are positive, the company’s solvency and liquidity position warrant close scrutiny. Further due diligence on funding arrangements and business sustainability is recommended before considering investment.

AYAN RETAILS LTD - Analysis Report

Company Number: 13168799

Analysis Date: 2025-07-29 20:59 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency risk, with net liabilities of £24,772 as of the latest financial year end, indicating that liabilities exceed assets. The minimal positive net current assets (£1,228) are insufficient to offset long-term liabilities, and the company’s equity remains deeply negative.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Funds: The company has persistent negative equity (£-24,772 in 2024 and £-32,712 in 2023), indicating accumulated losses and erosion of capital.
• Reliance on Director Loans: Substantial director loans (£33,687 short-term) form a large part of current liabilities, suggesting dependence on insider funding to meet operational needs.
• Poor Liquidity Position: Very low cash balance (£477) relative to current liabilities (£49,249) poses liquidity risk, potentially impairing the ability to meet short-term obligations without additional financing.

3. Positive Indicators:

• Improvement in Net Current Assets: The company moved from negative net current assets (£-6,712 in 2023) to a slightly positive position (£1,228 in 2024), showing some operational improvement in working capital management.
• Consistent Employee Base: Maintains a small, stable workforce (average 3 employees) which could help control overhead costs.
• No Filing or Compliance Issues: Accounts and confirmation statement filings are up to date, indicating compliance with regulatory requirements.

4. Due Diligence Notes:

• Investigate the nature and terms of director loans, especially repayment schedules and covenants, to assess refinancing risk.
• Review cash flow statements and bank facilities to understand liquidity management and whether additional capital injections or borrowing are expected.
• Clarify business sustainability plans given ongoing accumulated losses and negative equity.
• Confirm if any contingent liabilities or off-balance sheet obligations exist that may further impact solvency.
• Assess market positioning and revenue trends in retail sector under SIC 47110 to gauge operational viability.