COBALT MACHINERY LIMITED

Executive Summary

COBALT MACHINERY LIMITED is a newly formed company with a financially leveraged balance sheet showing negative net assets primarily due to significant long-term liabilities. While current liquidity appears sufficient and no compliance issues exist, the heavy reliance on related party support and lack of profitability data present elevated solvency risk. Further due diligence on debt terms, operational plans, and asset quality is essential before considering investment.

COBALT MACHINERY LIMITED - Analysis Report

Company Number: 15360833

Analysis Date: 2025-07-29 17:39 UTC

1. Risk Rating: HIGH
   The company shows significant net liabilities (£290,759 negative shareholders’ funds) and a large long-term creditor balance (£500,000) despite being newly incorporated. This raises concerns about solvency and financial stability at an early stage.

2. Key Concerns:

• Negative Net Worth: Shareholders’ funds are deeply negative, indicating liabilities exceed assets substantially. This can impair the company's ability to raise capital and meet obligations.
• Large Long-Term Debt: £500,000 owed beyond one year, described as "other creditors," with no indication of repayment terms or security, poses a risk if not well-supported.
• Early Stage Financial Position: Incorporated December 2023, so the first accounting period reflects initial investment and operational setup, with no income statement available to assess profitability or cash flow generation.

3. Positive Indicators:

• Adequate Current Assets vs Current Liabilities: Net current assets at £174,199 show the company can cover short-term liabilities (£423,460) with current assets (£597,659), including £111,094 cash, suggesting reasonable short-term liquidity.
• Going Concern Statement: Directors assert going concern status based on expected funding and support from a related party, which may mitigate immediate solvency concerns.
• No Filing or Compliance Issues: Accounts and confirmation statement filings are up to date with no overdue filings or penalties noted.

4. Due Diligence Notes:

• Verify the nature, terms, and security of the £500,000 long-term creditor balance and confirm the related party support mentioned by directors.
• Investigate the business model, revenue streams, and cash flow projections since no income statement was filed; seek management accounts or forecasts to understand operational viability.
• Assess director backgrounds and PSCs for any regulatory or reputational risks, though none are apparent from current data.
• Confirm the status and recoverability of debtors (£164,949) and stock (£321,616) to validate asset quality.