CHURCH ROAD MOTORWORKS LTD

Executive Summary

Church Road Motorworks Ltd demonstrates a high-risk profile due to persistent net current liabilities and minimal cash reserves, raising solvency and liquidity concerns. While regulatory compliance is up to date and tangible assets exist, the company’s financial buffer is very limited. Further investigation into creditor obligations, director financing, and operational cash flows is warranted to assess viability.

CHURCH ROAD MOTORWORKS LTD - Analysis Report

Company Number: 14500228

Analysis Date: 2025-07-20 17:06 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits significant net current liabilities (£13,463 as of 2024) and very low net assets (£37), indicating a precarious financial position. Cash reserves have dropped markedly from £4,064 in 2023 to £960 in 2024, signaling potential liquidity stress. The balance sheet shows a material decline in fixed assets and persistent creditor balances, which collectively raise concerns about solvency and the ability to meet short-term obligations.

2. Key Concerns:

• Liquidity Risk: Cash on hand is minimal (£960), and current liabilities substantially exceed current assets, suggesting difficulty in covering immediate debts.
• Solvency Issues: Net current liabilities have been persistently negative and only marginal positive net assets exist, indicating limited equity buffer and potential insolvency risk if losses continue.
• Director Advances: The directors have outstanding balances owed to them (£2,558), which may reflect reliance on director financing and potential cash flow management concerns.

3. Positive Indicators:

• No Overdue Filings: The company is up to date with both accounts and confirmation statement filings, indicating regulatory compliance and no immediate governance red flags.
• Active Business: The company is active in a defined trade area (maintenance and repair of motor vehicles) with a small workforce (average 4 employees), suggesting operational continuity.
• Tangible Assets: The company holds tangible fixed assets (plant and machinery valued at £13,500), providing some collateral value to support operations.

4. Due Diligence Notes:

• Investigate the nature and timing of the creditor balances, especially corporation tax and social security liabilities, to assess potential enforcement actions or payment plans.
• Review directors’ loans and advances for terms and repayment schedules to understand impact on liquidity and financial health.
• Obtain cash flow forecasts and management accounts to evaluate operational cash generation and working capital management going forward.
• Assess revenue streams and profitability trends (not disclosed in full) to determine sustainability and capacity to improve financial position.
• Verify if any contingent liabilities or off-balance sheet risks exist given the tight financial position.