Company Number: SC706209

Analysis Date: 2025-07-20 11:01 UTC

1. Risk Rating: MEDIUM
   The company shows a marked decline in net assets from £2,450 in 2023 to £357 in 2024, indicating erosion of equity and potential solvency pressure. While liquidity remains positive with net current assets of £1,637, the reduction year-over-year combined with outstanding long-term creditors gives rise to moderate financial risk.

2. Key Concerns:

• Significant drop in net assets and shareholders’ funds (from £2,450 to £357) within one year, signaling possible operational losses or impairment.
• Long-term liabilities remain substantial (£5,887), close to total assets less current liabilities (£6,244), which could constrain financial flexibility.
• Small and shrinking employee base (from 3 to 2) may reflect operational downsizing or instability impacting business continuity.

3. Positive Indicators:

• Positive net current assets indicate the company can meet short-term obligations as of the latest accounts.
• No overdue filings or compliance issues; accounts and confirmation statements are up to date.
• Sole director and 75-100% shareholder is consistent, suggesting clear management control without governance conflicts.

4. Due Diligence Notes:

• Investigate causes behind sharp fall in net assets and retained earnings between 2023 and 2024. Analyze income statement and cash flow details if available.
• Clarify nature and terms of “Other creditors” (£5,000 due after one year) to assess refinancing or repayment risks.
• Review operational strategy given employee reduction and whether revenue or profit trends support sustainable business.
• Confirm no director disqualifications or related party transactions that may affect governance integrity.