BABASNUG LIMITED

Executive Summary

Babasnug Limited exhibits financial distress with negative net assets and consistently high liabilities relative to assets, posing a high solvency and liquidity risk. While the company remains compliant with filings and operationally active, the limited asset base and poor working capital position warrant further investigation before any investment consideration. Close scrutiny of creditor terms and cash flow is recommended.

BABASNUG LIMITED - Analysis Report

Company Number: 12949963

Analysis Date: 2025-07-20 14:18 UTC

1. Risk Rating: HIGH
   The company shows signs of significant financial distress, particularly with negative net assets and liabilities exceeding total assets. This raises serious solvency concerns.

2. Key Concerns:

• Negative Shareholders Funds: The net assets reported for 2023 are -£7,069, indicating the company's liabilities exceed its assets, which poses a solvency risk.
• Persistent Current Liabilities: Current liabilities remain constant at £11,700 over the last three years, while current assets have decreased drastically, suggesting liquidity issues.
• Minimal Operating Assets and Cash: Fixed assets are minimal (£4,500) and current assets are very low (£55 in 2023), which could impair the company's ability to meet short-term obligations.

3. Positive Indicators:

• Timely Filing: The company is up to date on both accounts and confirmation statement filings, indicating good regulatory compliance.
• Active Trading Status: The company is active, not in liquidation or administration, showing operational continuity.
• Stable Management: The sole director has been in position since incorporation, suggesting consistent leadership.

4. Due Diligence Notes:

• Investigate the nature of the £11,700 creditor balance, particularly if it is long-term debt or trade payables, and any repayment plans.
• Review cash flow statements or bank statements to assess liquidity and cash management, as current assets are insufficient to cover current liabilities.
• Examine the business model and revenue generation capability given the very low current assets and negative net assets.
• Confirm whether there are any contingent liabilities or off-balance sheet obligations not disclosed.
• Assess the director’s plans or strategies to improve the financial position or whether external financing is anticipated.