COMMVERSANT LIMITED

Executive Summary

Commversant Limited faces a high risk profile primarily due to liquidity pressures and a substantial erosion of net assets in the latest year. While the company remains compliant with filings and operational, the financial indicators suggest urgent need for further investigation into its cash flow management and creditor exposures. Investors should exercise caution pending deeper due diligence into the sustainability of the business model and financial recovery plans.

COMMVERSANT LIMITED - Analysis Report

Company Number: 12839849

Analysis Date: 2025-07-20 15:07 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns with net current liabilities and a steep decline in net assets over the latest financial year. The sharp drop from net assets of £43,969 in 2023 to £730 in 2024 signals financial distress.

2. Key Concerns:

• Negative Working Capital: Net current assets turned negative (£-1,184) in 2024 from a positive £42,063 in 2023, indicating liquidity strain and potential difficulty in meeting short-term obligations.
• Dramatic Decline in Net Assets: Net assets plummeted from £43,969 to £730 within one year, suggesting operational or financial challenges significantly eroding shareholder value.
• High Current Liabilities Relative to Cash: Current liabilities (£68,951) exceed cash balances (£23,719) by a substantial margin, raising concerns about the company's ability to cover immediate debts without additional financing.

3. Positive Indicators:

• Active Status with Up-to-date Filings: The company is active, not in liquidation, and filings (accounts and confirmation statements) are current, showing compliance with statutory requirements.
• Established Directors with Control: Two directors appointed at incorporation remain active, providing continuity in leadership.
• Ongoing Business Operations: The company operates in a niche education sector (SIC 85590) and maintains an active website presenting bespoke training solutions, indicating ongoing commercial activity.

4. Due Diligence Notes:

• Investigate Cause of Financial Decline: Obtain management accounts and cash flow forecasts to understand the drivers behind the sharp net asset decrease and negative working capital.
• Assess Debtor Quality: Large reduction in debtors (from £79,601 to £44,048) warrants scrutiny of collectability and aging of receivables to evaluate cash flow risk.
• Examine Tax and Social Security Liabilities: Taxation and social security creditors remain high (£65,478), assess any potential arrears or disputes with HMRC.
• Review Lease Obligations Impact: Operating lease commitments have decreased but remain significant (£23,548), consider their impact on cash flow and future financial commitments.
• Confirm Going Concern Assumptions: Directors state a reasonable expectation of going concern, but given financials, this should be validated with stress testing and scenario analysis.