BLACKWATER SOUNDS LIMITED

Executive Summary

Blackwater Sounds Limited exhibits significant financial distress evident from its negative net current assets and shareholders' funds as at July 2024, although it remains compliant with filing requirements. The company’s short operational history and negative equity pose a high risk to solvency and liquidity, warranting careful scrutiny of its liabilities and business plan before investment consideration.

BLACKWATER SOUNDS LIMITED - Analysis Report

Company Number: 14253298

Analysis Date: 2025-07-20 14:09 UTC

1. Risk Rating: HIGH
   The company shows significant solvency and liquidity concerns based on the latest financial data. Negative net current assets and shareholders' funds indicate an inability to cover short-term liabilities, raising substantial risk of default.

2. Key Concerns:

• Negative net current assets of £(6,269) as of 31 July 2024, demonstrating liquidity shortfall.
• Negative shareholders' funds of £(4,650), reflecting an erosion of equity and potential insolvency.
• Limited operational history (incorporated July 2022) with minimal turnover data, making trend analysis difficult and business viability uncertain.

3. Positive Indicators:

• The company is current with statutory filings and not overdue on accounts or confirmation statements, indicating regulatory compliance.
• The business operates in a defined niche (retail sale of music and video recordings) with a clear industry classification.
• The presence of fixed assets, albeit small (£1,619), suggests some investment in operational capability.

4. Due Diligence Notes:

• Investigate the nature of current liabilities (£11,872) to understand creditor composition and payment terms.
• Review cash flow statements or internal management accounts (not filed) for insights on liquidity management and revenue generation.
• Assess the business model viability given the negative equity and examine plans for capital injection or debt restructuring.
• Verify director background and any related party transactions, especially given the small scale and negative net assets.
• Confirm the accuracy of asset valuations and whether any off-balance sheet liabilities exist.