Company Number: SC679997

Analysis Date: 2025-07-29 20:32 UTC

1. Risk Rating: MEDIUM

Justification: Baillie Advisory Limited’s financial data indicates moderate solvency and liquidity risks. While the company remains active and compliant with filing deadlines, the significant decline in net current assets and shareholders’ funds between 2023 and 2024 warrants caution. The company operates with minimal share capital and limited cash reserves, which could impact operational flexibility.

2. Key Concerns:

• Declining Net Current Assets and Equity: Net current assets decreased from £18,871 in 2023 to £6,403 in 2024, and shareholders’ funds reduced from £19,964 to £6,403 in the same period, indicating weakening financial stability.
• Low Cash Balance: Cash at bank fell substantially from £14,059 in 2023 to £1,449 in 2024, raising potential liquidity concerns for meeting short-term obligations.
• Growing Current Liabilities: Current liabilities increased from £28,449 in 2023 to £39,803 in 2024, driven largely by taxation and other creditors, suggesting increased pressure on payable commitments.

3. Positive Indicators:

• Compliance and Timeliness: The company is up to date with accounts and confirmation statement filings, reflecting good regulatory adherence.
• No Audit Requirement: Being a small company, it benefits from audit exemptions, reducing administrative burden.
• Experienced Director: The sole director is a chartered accountant, indicating professional oversight of financial affairs.
• Sustainable Business Category: The company operates in professional, scientific and technical activities (SIC 74909), typically with lower capital intensity.

4. Due Diligence Notes:

• Investigate reasons for the sharp decline in net current assets and shareholders’ funds between 2023 and 2024, including any one-off expenses or changes in business operations.
• Review cash flow statements and debtor collection periods to assess liquidity management and potential credit risk.
• Clarify the composition and nature of increased current liabilities, particularly tax and other creditors, to evaluate timing and risk of default.
• Confirm absence of contingent liabilities or off-balance sheet obligations that may affect solvency.
• Assess client concentration and contract terms given substantial debtor balances relative to cash.
• Verify that the director’s dual role and company structure do not present governance or operational risks.
• Examine underlying reasons for depreciation of tangible fixed assets to confirm asset utilization and replacement needs.