Company Number: SC723219

Analysis Date: 2025-07-29 20:41 UTC

1. Risk Rating: MEDIUM
   The company shows a small but stable equity base with total shareholders’ funds around £6,900. However, the negative net current assets position in the latest year (£-1,004) indicates potential liquidity concerns that warrant monitoring.

2. Key Concerns:

• Liquidity Pressure: Current liabilities (£5,035) exceed current assets (£4,031) as of 29 February 2024, resulting in negative working capital which could strain short-term cash flows.
• Recent Downturn in Working Capital: The net current assets declined from a positive £3,066 the previous year to negative in the latest year, suggesting either increased short-term liabilities or reduced current asset realizability.
• Limited Scale and Resources: As a micro-entity with only 2 employees and modest fixed assets, the company may have limited operational flexibility to absorb shocks or finance growth.

3. Positive Indicators:

• Consistent Shareholders’ Funds: Equity remains positive and relatively stable over three years, indicating no erosion of capital base.
• Timely Compliance: No overdue filings for accounts or confirmation statements, demonstrating good regulatory compliance and governance discipline.
• Stable Ownership and Management: The director and persons with significant control have remained constant since incorporation, reducing governance risk.

4. Due Diligence Notes:

• Investigate the cause of the working capital deterioration in the latest year — whether due to increased payables, slower receivables, or inventory issues.
• Review cash flow statements if available to assess operational cash generation and short-term liquidity management.
• Confirm the nature of current liabilities and whether any are overdue or subject to refinancing risk.
• Assess the business model sustainability given the micro scale and the SIC code 71129 (other engineering activities), including client concentration and contract terms.
• Verify no director disqualifications or adverse conduct history for Brian Rae or related parties.