CHARLIE DAVIES CONNECTIONS LIMITED

Executive Summary

Charlie Davies Connections Limited shows pronounced financial distress with persistent negative working capital and shareholders' funds, raising serious concerns about its ability to meet short-term obligations. While it maintains regulatory compliance and operates in a low-capital sector, the reliance on director loans and the large balance of non-trade debtors warrant further scrutiny. Prospective investors should conduct detailed due diligence on cash flow viability and related-party transactions before engagement.

CHARLIE DAVIES CONNECTIONS LIMITED - Analysis Report

Company Number: 14123686

Analysis Date: 2025-07-29 15:06 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency concerns, reflected by consistent negative net current assets and shareholders' funds. The latest accounts show net current liabilities and an overall negative equity position, indicating the company is unable to cover short-term obligations with current assets.

2. Key Concerns:

• Negative Working Capital: The current liabilities exceed current assets by £2,750 as of January 2024, worsening from previous periods, signaling liquidity stress.
• Persistent Losses and Negative Equity: Shareholders' funds stand at negative £2,750, deteriorating from prior years, implying accumulated losses and potential insolvency risk.
• Director Advances and Related Party Transactions: Substantial director loans (over £27k outstanding) suggest reliance on external funding by management, which may indicate cash flow difficulties or undercapitalization.

3. Positive Indicators:

• Compliance with Filing Requirements: Accounts and confirmation statements are up to date with no overdue filings, indicating regulatory compliance and governance diligence.
• Active Trading Status: The company is active and continues operations in management consultancy (SIC 70229), a sector with relatively low capital intensity.
• Small Company Reporting Exemption: Utilization of small company exemptions reduces administrative burden and costs.

4. Due Diligence Notes:

• Investigate the nature and collectability of "Other debtors" (£27,828), as this represents the bulk of current assets but is not trade receivables. The risk of non-realization or delays could exacerbate liquidity risk.
• Review the terms and conditions of director loans, including repayment schedules and whether these are arms-length transactions.
• Assess the company’s cash flow forecasts and plans to return to positive working capital and equity positions.
• Clarify reasons behind director resignation in April 2024 and any impact on governance or operations.
• Understand the company's business model and revenue generation capacity given the persistent negative equity and reliance on director funding.