Company Number: 13839441

Analysis Date: 2025-07-20 11:53 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits significant net current liabilities and a negative working capital position, with current liabilities substantially exceeding current assets. The existence of a large loan from directors classified under current liabilities, combined with overall low net assets relative to total liabilities, indicates heightened solvency and liquidity risk.

2. Key Concerns:

   • Negative Net Current Assets: At 31 December 2023, net current assets stand at approximately -£123,648, reflecting a liquidity shortfall that could challenge meeting short-term obligations.
   • High Level of Debt: Total creditors due after more than one year amount to approximately £345,286, primarily bank loans repayable over more than five years, which imposes significant long-term financial commitments.
   • Director Loans Included in Creditors: The presence of a director loan amounting to £152,071 included within other creditors raises questions about the company’s reliance on related-party financing, which may affect financial stability if not properly managed.

3. Positive Indicators:

   • Investment Property Asset Base: The company holds investment property valued at £493,000, which provides a substantial fixed asset base that could be leveraged or sold if necessary.
   • No Overdue Filings: The company is current with its statutory filing obligations for both accounts and confirmation statements, which supports regulatory compliance and governance standards.
   • Stable Shareholder Control: Both directors hold significant share and voting rights with the power to appoint/remove directors, indicating stable governance at the ownership level.

4. Due Diligence Notes:

   • Examine Cash Flow and Debt Servicing Capacity: Detailed cash flow analysis is needed to assess the company’s ability to service both short-term liabilities and long-term bank loans.
   • Clarify Director Loan Terms: Investigate the terms, repayment schedule, and security arrangements related to the director loan included in current liabilities.
   • Valuation and Liquidity of Investment Property: Confirm the reliability of the property valuation and assess marketability or encumbrances on the investment property.
   • Review Profitability and Revenue Streams: As the profit and loss account is not delivered due to small company exemptions, further inquiry is recommended to understand operational profitability and sustainability.