Company Number: 14253096

Analysis Date: 2025-07-20 14:09 UTC

1. Risk Rating: MEDIUM
   The company shows modest net current assets and net assets with a slight improvement year-on-year. However, the reliance on director loans and low cash reserves relative to current liabilities present some solvency and liquidity concerns given its recent incorporation and small scale.

2. Key Concerns:

• Significant current liabilities are composed largely of director loans (£16,587 in 2024 vs £6,420 in 2023), indicating reliance on related party funding to meet obligations rather than operational cash flow.
• Low cash balances (£5,665 at 2024 year-end) relative to current liabilities (£16,925) suggest limited liquidity to cover short-term debts without external support.
• The company is newly incorporated (2022) and remains a micro entity with limited financial history, which inherently increases uncertainty about operational stability and sustainability.

3. Positive Indicators:

• The company has reported positive net current assets and net assets, albeit small, showing incremental improvements year over year (£292 in 2023 to £1,735 in 2024).
• Accounts and confirmation statement filings are up to date with no overdue returns, indicating compliance with statutory requirements.
• The business operates in the used car sales sector (SIC 45112), a tangible asset-based business with potential for cash generation.

4. Due Diligence Notes:

• Investigate the terms, repayment schedules, and interest rates of director loans to assess financial risk and dependency on shareholder funding.
• Review cash flow forecasts and operational profitability to evaluate sustainability beyond continued director support.
• Clarify revenue streams, customer base, and inventory management to understand operational stability and growth prospects.
• Confirm no undisclosed liabilities or contingent risks exist given the small scale and related party financing.
• Consider background checks on the current director for any governance or conduct issues despite no public indications here.