Company Number: 13903072

Analysis Date: 2025-07-20 16:06 UTC

1. Risk Rating: HIGH
   The company shows significant solvency concerns due to a material imbalance between current liabilities and current assets, as well as substantial long-term obligations despite minimal equity.

2. Key Concerns:

• Negative Working Capital: As at 29 February 2024, current liabilities (£1,635) exceed current assets (£5,123) but the net current assets reported are positive at £3,488, which appears inconsistent. However, the large finance lease obligation (£24,337) classified as long-term liabilities substantially reduces net assets. This suggests liquidity strain and potential difficulty meeting short-term obligations.
• Minimal Equity and Net Assets: Shareholders’ funds stand at only £101, unchanged from prior years, indicating no retained earnings or cushion to absorb losses or debts. This minimal capital base increases the risk of insolvency.
• High Leverage from Finance Lease: The presence of £24,337 in finance lease obligations, with no corresponding increase in equity or cash reserves, raises concerns about the company’s ability to service this debt, especially given modest cash balances (£2,289).

3. Positive Indicators:

• Compliance and Filing: Accounts and confirmation statements are filed on time with no overdue filings, indicating good governance and regulatory compliance.
• Stable Employee Base and Management: The company operates with a consistent staff count (2 employees) and a named director with relevant professional background (optometrist), suggesting operational focus.
• Tangible Asset Investment: Acquisition of motor vehicles (£27,934 cost, net £20,950) may support operational capacity, indicating business development efforts.

4. Due Diligence Notes:

• Clarify the nature and terms of the finance lease obligations (£24,337), including repayment schedule and impact on cash flow.
• Review detailed cash flow statements and management accounts to assess liquidity management and operating cash generation.
• Investigate the apparent inconsistency in net current assets figures and reconcile working capital components.
• Assess revenue generation and profitability trends since incorporation, as profit and loss account figures are not disclosed publicly.
• Confirm any contingent liabilities or off-balance sheet commitments not reflected in the accounts.