CHUFFING GOOD BAKES LTD

Executive Summary

Chuffing Good Bakes Ltd demonstrates high financial risk characterized by worsening negative equity and liquidity shortfalls fueled by increased reliance on director loans. While the company remains compliant with statutory filings and stable in management, its operational sustainability is uncertain without clear plans to reverse losses and improve cash flow. Further investigation into funding arrangements and business performance is recommended before considering investment.

CHUFFING GOOD BAKES LTD - Analysis Report

Company Number: 12785418

Analysis Date: 2025-07-20 11:35 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks as evidenced by persistent negative net assets and net current liabilities, increasing creditor balances, and minimal cash reserves.

2. Key Concerns:

• Persistent Negative Equity: Shareholders’ funds have deteriorated from positive £760 in 2020 to a negative £1,326 in 2024, indicating accumulated losses and erosion of capital.
• Liquidity Shortfall: Net current liabilities increased from £179 positive in 2020 to a negative £1,549 in 2024, with cash on hand declining to just £117, raising concerns about the company’s ability to meet short-term obligations.
• Director Loans: A substantial portion of current liabilities (£1,212 in 2024) consists of loans from directors, suggesting reliance on insider funding to sustain operations, which may not be sustainable or attractive to external investors.

3. Positive Indicators:

• No Overdue Filings: The company’s accounts and confirmation statements are up to date, indicating compliance with statutory filing requirements and governance.
• Stable Management: The director has been in place since incorporation with clear responsibility acknowledged, and there are no records of disqualification or governance issues.
• Going Concern Statement: The director asserts a going concern basis in the accounts, which may reflect internal optimism about future operations or restructuring plans.

4. Due Diligence Notes:

• Investigate the nature and terms of director loans, including repayment schedules and any security provided.
• Review cash flow forecasts and operational plans to understand how the company intends to address working capital deficits and restore solvency.
• Obtain information on revenue trends, profitability, and customer base stability to assess operational sustainability.
• Confirm whether there are any contingent liabilities or off-balance sheet obligations not disclosed in the accounts.
• Evaluate the impact of minimal tangible fixed assets and one employee on scalability and operational risk.