CHILDREN'S PARTIES LTD

Executive Summary

Children's Parties Ltd is a small, privately held company showing modest profitability and positive net assets but faces liquidity challenges due to low cash reserves and high debtor balances. The absence of employees and close director oversight suggest limited operational scale and potential governance concentration risks. Overall regulatory compliance is maintained, but further due diligence on cash flow and debtor quality is advisable to better assess financial stability and sustainability.

CHILDREN'S PARTIES LTD - Analysis Report

Company Number: 13319432

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

1. Risk Rating: MEDIUM
   The company appears solvent with positive net current assets and net assets, but low cash reserves relative to current liabilities and high debtor balances raise liquidity concerns. Modest profits and no employees suggest limited operational scale and potential sustainability risk.

2. Key Concerns:

• Liquidity Risk: Cash at bank is only £2,700 against current liabilities of £76,148 as of 31 March 2025, indicating possible cash flow constraints. High debtor balances (£81,444) relative to cash suggest dependence on receivables collection.
• Operational Scale and Sustainability: The company has no employees recorded and very modest profits (£759 in 2025), indicating limited operational capacity and potential challenges in growing or sustaining the business.
• Concentration and Governance: Two directors share the same address, and one also acts as company secretary, which may limit governance independence and could be a concern for investor oversight.

3. Positive Indicators:

• Solvency Position: Positive net current assets (£7,996) and net assets indicate the company’s assets exceed liabilities at the balance sheet date.
• Compliance: No overdue filings; accounts and confirmation statements are up to date, demonstrating regulatory compliance.
• Consistent Profitability: The company recorded a small profit before and after tax in the latest period, improving from previous years, which shows some operational control.

4. Due Diligence Notes:

• Review debtor composition and aging to assess collectability and credit risk.
• Examine cash flow statements (if available) to understand liquidity management and timing of cash inflows/outflows.
• Investigate business model and service delivery method given no employees and small profits—determine if contractors are used or if scale is expected to grow.
• Confirm if directors have any disqualifications or adverse conduct records beyond public data here.
• Assess related party transactions between the two directors and any risk of conflicts of interest.