Company Number: 13936842

Analysis Date: 2025-07-29 19:41 UTC

1. Risk Rating: MEDIUM
   The company exhibits a moderate risk profile primarily due to its negative net current assets and relatively high current liabilities compared to current assets. However, the presence of significant investment property assets and shareholder funds provides a buffer, mitigating immediate solvency concerns.

2. Key Concerns:

• Negative Net Current Assets: At the 2024 year-end, current liabilities (£35,359) exceed current assets (£2,750), resulting in net current liabilities of approximately £32,609, indicating potential short-term liquidity constraints.
• Significant Long-Term Debt: The company holds bank loans totaling £61,200 secured against its property assets falling due beyond one year, which could pressure cash flows if rental income or other revenues are insufficient.
• Limited Operational History and Scale: Incorporated in 2022 with only one employee on average and minimal turnover information available, the company’s operational sustainability and revenue generation capacity remain uncertain.

3. Positive Indicators:

• Strong Asset Backing: Investment properties valued at £125,000 (including a £37,449 revaluation surplus) form the bulk of the company’s fixed assets, supporting its balance sheet strength.
• Positive Shareholders’ Funds: Net assets of £24,620 indicate positive equity, supported by retained earnings of £24,520, suggesting some profitability or capital retention over its short operating period.
• Compliance and Timely Filing: Accounts and confirmation statements are current and not overdue, indicating good regulatory compliance and governance practices.

4. Due Diligence Notes:

• Review Cash Flow and Income Sources: Detailed examination of cash flow statements and income streams is needed to assess the company’s ability to meet short-term obligations and service long-term debt.
• Valuation of Investment Properties: Verify the basis and independence of property valuations, as these significantly impact the balance sheet and debt security.
• Debt Terms and Covenants: Clarify loan repayment schedules, interest rates, and any covenants or restrictions to evaluate financial flexibility and risk of default.
• Operational Plans: Understand business model, rental agreements, or other revenue generation mechanisms to assess sustainability.
• Director Backgrounds: Although no disqualifications are noted, further due diligence on directors’ track records may be prudent given the company's scale and financial structure.