Company Number: 13127444

Analysis Date: 2025-07-20 12:51 UTC

1. Risk Rating: HIGH
   The company shows persistent and significant negative net current assets and shareholders’ funds over multiple years, indicating ongoing solvency concerns. Current liabilities notably exceed current assets, and cash balances are very low, suggesting liquidity stress. The negative equity position and reliance on director loans underscore financial vulnerability.

2. Key Concerns:

• Solvency Risk: The company has consistently reported negative net assets (e.g., -£33,728 in 2024) and net current liabilities (e.g., -£35,623 in 2024), implying it cannot cover its liabilities with its assets.
• Liquidity Constraints: Cash at bank is very low (£452 in 2024), while current liabilities are high (£45,755), indicating potential difficulty meeting short-term obligations without external funding.
• Reliance on Director Loans: Director loan accounts have increased substantially from £16,812 in 2023 to £37,106 in 2024, suggesting dependency on internal funding to maintain operations.

3. Positive Indicators:

• Timely Compliance: The company is current with its accounts and confirmation statement filings, indicating regulatory compliance and good governance in this regard.
• Stable Employee Base: The company maintains a small but stable number of employees (average 3), appropriate for its size and industry.
• Active Online Presence: The company has an active website and contact details, which is positive for operational transparency and customer engagement in the hairdressing industry.

4. Due Diligence Notes:

• Investigate the nature and terms of the director loan accounts to assess whether these are sustainable or may be called in, impacting liquidity.
• Review cash flow statements and management accounts (not provided) to understand operational cash generation and short-term liquidity management.
• Clarify any contingent liabilities or pending obligations not reflected in the balance sheet that may exacerbate financial risks.
• Assess the business model's viability given ongoing negative equity, including profitability trends and client retention in the competitive hairdressing sector.
• Confirm whether any external funding or restructuring plans are in place to address solvency issues.