Company Number: 13952194

Analysis Date: 2025-07-20 11:16 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits significant liquidity concerns with net current liabilities of £34,006 as of 31 March 2024, an improvement from prior year but still negative. This indicates difficulty in meeting short-term obligations. Although net assets have improved to £11,184, the persistent working capital deficit and relatively low cash balance suggest ongoing solvency risk.

2. Key Concerns:

• Negative Working Capital: Net current liabilities remain substantial (£34k), reflecting potential cash flow strain and pressure on meeting creditor payments.
• Reliance on Goodwill Asset: Intangible assets, mainly goodwill (£32k), make up a large portion of total assets. Goodwill is amortised and may be impaired if business performance deteriorates.
• Small Scale and Limited Operating History: Incorporated in 2022, with only two employees, the company is in early growth stages and faces typical startup operational risks, including uncertain revenue streams and limited financial resilience.

3. Positive Indicators:

• Improvement in Net Assets: Shareholders’ funds increased from £3,077 (2023) to £11,184 (2024), indicating some progress in retaining earnings or reducing losses.
• No Overdue Filings: The company is compliant with filing deadlines for accounts and confirmation statements, suggesting good governance and regulatory adherence.
• Stable Management and Ownership: Directors and significant controllers have been in place since incorporation with no indications of disqualification or governance issues.

4. Due Diligence Notes:

• Investigate cash flow statements to assess operational cash generation and timing of creditor payments versus debtor collections.
• Review debtor aging and collectability of the £7,547 trade debtors to confirm liquidity assumptions.
• Assess the basis and sustainability of goodwill valuation, including any impairment risks.
• Understand the company’s business plan and revenue outlook to evaluate prospects for improving working capital and profitability.
• Confirm that no contingent liabilities or off-balance sheet obligations exist that could exacerbate solvency concerns.
• Review any related party transactions given the ownership and directorship overlap.