Company Number: 12567840

Analysis Date: 2025-07-20 13:01 UTC

1. Risk Rating: HIGH
   The company exhibits sustained negative net assets and net current assets over multiple years, indicating persistent insolvency risk. Current liabilities exceed current assets significantly, and cash holdings are minimal, raising liquidity concerns.

2. Key Concerns:

• Negative Net Assets and Working Capital: The company reported net liabilities of £3,223 at the 2024 year-end with net current liabilities of £3,223, showing a deteriorating financial position over several years.
• Minimal Cash Reserves: Cash at bank dropped sharply to £47 in 2024 from £1,262 in 2023, suggesting potential cash flow difficulties impacting operational capability.
• Unemployed Directors and Limited Capital: Both directors are listed as unemployed and the issued share capital is nominal (£2), which may constrain the company’s ability to raise funds or manage financial distress.

3. Positive Indicators:

• Timely Filing Compliance: The company’s accounts and confirmation statement filings are up to date with no overdue returns, reflecting compliance with regulatory requirements.
• Stable Employee Base: The company maintains a small but stable workforce of two employees over the last two years, which may indicate operational continuity.
• Consistent Business Activity: The company operates in retail sale of clothing and textiles, with turnover implied though not disclosed, suggesting ongoing business operations rather than dormancy.

4. Due Diligence Notes:

• Examine Detailed Cash Flow Statements: To better understand liquidity pressures and the company’s ability to meet short-term obligations.
• Assess Trade Payables and Creditor Relationships: Investigate the nature and terms of the £5,600 creditors and any risks of supplier actions or legal claims.
• Review Directors’ Plans and Financial Support: Understand the directors’ strategy to address negative equity and whether additional funding or restructuring is planned or in progress.
• Confirm Revenue and Profitability Trends: As turnover and profit figures are not provided, request management accounts or more detailed financial disclosures to assess business viability.
• Investigate Absence of Audit and Profit & Loss Account Filing: While exempt as a small company, confirm no material risks are hidden due to limited reporting requirements.