Company Number: 12560982

Analysis Date: 2025-07-19 12:24 UTC

1. Risk Rating: HIGH
   The company exhibits a persistently negative net working capital over multiple years, with net current liabilities worsening from £(3,753) in 2020 to £(16,309) in 2024, indicating ongoing liquidity stress. Shareholders’ funds have also declined substantially from £29,087 to £6,859. These factors suggest potential solvency and cash flow challenges.

2. Key Concerns:

• Liquidity Risk: Current liabilities consistently exceed current assets by a significant margin, raising concerns about the company’s ability to meet short-term obligations as they fall due.
• Declining Equity Base: Shareholders’ funds have more than halved over four years, signaling erosion of the financial cushion and possibly sustained losses.
• Limited Operational Scale: The company remains micro-sized with only one employee on average and minimal share capital (£100), which may constrain operational resilience and financial flexibility.

3. Positive Indicators:

• Compliance: No overdue filings for accounts or confirmation statements; the company appears compliant with Companies House requirements.
• Stable Management: The sole director, Mr. Robert Edmund Wells, has been in position since incorporation, suggesting continuity in governance.
• Asset Base: The company holds fixed assets valued at approximately £23k, which may provide some tangible backing, albeit limited.

4. Due Diligence Notes:

• Investigate the nature and terms of current liabilities to assess whether any are overdue or subject to enforcement actions.
• Review management accounts or cash flow forecasts to evaluate short-term liquidity and operational cash generation.
• Clarify the cause of equity erosion—whether due to operating losses, asset write-downs, or distributions.
• Confirm no undisclosed related party transactions or contingent liabilities exist.
• Assess business model viability given the micro scale and negative working capital trend.