Company Number: 13976024

Analysis Date: 2025-07-20 17:18 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency concerns with negative net assets and net current liabilities worsening over the two-year period. Shareholders’ funds are substantially negative, indicating accumulated losses and a capital deficit.

2. Key Concerns:

• Negative Net Assets and Working Capital: The company’s net current liabilities increased from £5,335 to £8,477 and shareholders' funds deteriorated from -£5,907 to -£10,690, signaling financial distress and inability to cover short-term obligations.
• Limited Fixed Assets and Dependence on Current Assets: Fixed assets are minimal (£359), and the business likely relies heavily on cash or receivables which may not be sufficient to meet liabilities.
• Director’s Loan Account: The director owes the company money (£2,951), but this is a small amount relative to the deficit and does not offset the negative equity or liquidity issues.

3. Positive Indicators:

• Compliance and Timely Filings: Accounts and confirmation statements are up to date with no overdue filings, indicating good governance and compliance practices.
• Active Status and Growing Employment: The company is active and increased average employees from 3 to 4, suggesting operational activity and potential business growth.
• Sole Director with Full Control: Having a single controlling director may allow for streamlined decision-making and potentially quicker responses to financial challenges.

4. Due Diligence Notes:

• Investigate the causes of sustained losses and negative equity, including profitability metrics and cash flow statements not available here.
• Assess the company’s ability to generate positive operating cash flows to meet current liabilities and whether additional funding is planned or required.
• Review any contingent liabilities or off-balance sheet items not disclosed in micro-entity accounts that might impact solvency.
• Confirm the nature and collectability of current assets, particularly if they include receivables or inventory.
• Evaluate the director’s plans for recapitalization or restructuring given the financial position.