Company Number: 12598564

Analysis Date: 2025-07-20 15:08 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency risks, with net liabilities increasing and persistent negative net assets over multiple years. Current liabilities exceed current assets substantially, indicating liquidity challenges.

2. Key Concerns:

• Negative Net Assets: The company’s net assets have been negative since at least 2021, worsening from £-5,050 in 2021 to £-4,814 in 2024, signaling ongoing losses and erosion of equity.
• Working Capital Deficit: Current liabilities exceed current assets by £4,814 (2024), consistent with previous years, highlighting potential difficulties in meeting short-term obligations.
• Declining Turnover: Revenue has decreased steadily from £16,351 (2021) to £10,562 (2024), suggesting declining sales or demand impacting operational sustainability.

3. Positive Indicators:

• Small Scale Operation: The micro-entity classification and absence of employees indicate a low-cost, potentially flexible business model reducing fixed overheads.
• Profit in Latest Period: Despite challenges, the company reported a small profit of £682 in the latest period, an improvement over prior years, which may suggest some operational control.
• No Overdue Filings: Accounts and confirmation statements are up to date, indicating compliance with regulatory filing requirements.

4. Due Diligence Notes:

• Investigate the underlying causes of sustained negative equity and whether shareholder loans or other forms of capital support exist but are not reflected on the balance sheet.
• Review cash flow statements and bank balances to assess actual liquidity and ability to meet short-term obligations beyond balance sheet figures.
• Evaluate the business model viability given declining turnover and industry position in niche retail/manufacturing of wood products.
• Clarify the absence of employees and confirm whether the director or third parties provide operational work, as this impacts sustainability.
• Confirm no contingent liabilities or off-balance sheet obligations exist despite company disclosures stating none.
• Assess the director’s plans or intentions to address the working capital deficit and improve financial health.