BADGERS OAK LIMITED

Executive Summary

Badgers Oak Limited, incorporated in mid-2023, currently shows high financial risk due to negative net current assets and shareholders’ funds, coupled with reliance on director loans. While regulatory compliance is up to date and the director supports the company’s going concern status, significant liquidity and solvency concerns remain. Further investigation into operational cash flow plans and director financing arrangements is essential before considering investment.

BADGERS OAK LIMITED - Analysis Report

Company Number: 14939714

Analysis Date: 2025-07-29 16:42 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks, as evidenced by its negative net current assets and shareholders' funds shortly after incorporation.

2. Key Concerns:

• Negative Net Working Capital: The company’s current liabilities (£132,257) substantially exceed its current assets (£43,123), creating a net current liability position of £89,134, indicating potential short-term liquidity problems.
• Negative Shareholders’ Funds: Shareholders’ funds stand at a negative £54,258, reflecting accumulated losses or funding deficiencies that undermine the company's capital base and financial stability.
• Director Loan Dependency: The company owes a significant amount (£99,132) to the director, with an interest rate of 10% and no fixed repayment date. This indicates reliance on director financing to meet obligations, raising concerns about sustainability without external funding or operational cash flows.

3. Positive Indicators:

• Active Status and Compliance: The company is currently active, with no overdue filings for accounts or confirmation statements, reflecting good regulatory compliance to date.
• Going Concern Statement: The director affirms ongoing support and believes the company can continue as a going concern, which may provide some operational stability in the near term.
• Initial Asset Base: The company holds tangible fixed assets valued at approximately £35,000, which may support operational activities in building project development.

4. Due Diligence Notes:

• Cash Flow and Operational Plans: Investigate detailed cash flow projections and business plans to understand how the company intends to address the liquidity shortfall and negative equity.
• Director Loan Terms and Support: Clarify the terms of the director’s loan, including interest accrual, repayment expectations, and the director’s capacity to continue financial support.
• Revenue Generating Activities: Review turnover and profit/loss data (not provided in current documents) to assess operational viability and capacity to generate sustainable income in the development of building projects sector.
• Related Party Transactions and Governance: Assess the impact of related party loans on company governance and independence, including the potential risks this poses to minority stakeholders or future investors.