Company Number: 12546433

Analysis Date: 2025-07-20 13:03 UTC

1. Risk Rating: MEDIUM
   The company shows improving financial strength with growing net assets and net current assets, but there are concerns around reliance on director loans and limited cash reserves which may affect liquidity.

2. Key Concerns:

• Liquidity Risk: Cash at bank is relatively low (£14,863 at 2024 year end) compared to current liabilities (£60,330), though net current assets remain positive due to high debtors and stocks. The operating cash flow position is unclear without a profit and loss statement.
• Reliance on Director Loans: A significant debtor balance (£116,314) is owed by directors at year end, raising questions about the nature and stability of these funds. Although repaid within nine months post year end, this dependence could pose a risk if directors are unable to repay in the future.
• Limited Transparency on Profitability: The accounts exclude an income statement and there is no audit due to small company exemption. This limits assessment of operational performance and sustainability.

3. Positive Indicators:

• Growing Net Assets: Shareholders’ funds increased from £62,305 in 2023 to £153,006 in 2024, indicating improved financial health.
• Positive Working Capital: Net current assets improved from £55,556 in 2023 to £88,771 in 2024, suggesting the company can cover short-term liabilities.
• No Overdue Filings or Compliance Issues: Accounts and confirmation statement filings are up to date, indicating good regulatory compliance and governance.

4. Due Diligence Notes:

• Obtain detailed profit and loss statements and cash flow projections to assess operational profitability and liquidity trends.
• Clarify the nature of director loans/advances and the company’s policy on these to evaluate financial stability and governance risks.
• Review stock composition and debtor quality to verify realizable value and potential bad debt risk.
• Investigate lease commitments or contingent liabilities that may impact future cash flows.
• Monitor for any changes in director appointments or control that could affect company strategy or financial support.