CORNERSTONE RENTALS LTD

Executive Summary

Cornerstone Rentals Ltd presents a high risk profile due to persistent negative net assets and a severe liquidity mismatch, with current liabilities vastly exceeding current assets. Although the company has invested in fixed assets and remains compliant with filing requirements, the lack of operational financial disclosure and ongoing working capital deficits raise serious concerns about its ability to meet obligations and sustain operations. Further detailed financial and operational due diligence is essential before considering any investment.

CORNERSTONE RENTALS LTD - Analysis Report

Company Number: NI682391

Analysis Date: 2025-07-29 16:06 UTC

1. Risk Rating: HIGH

The company exhibits significant solvency and liquidity concerns, with net liabilities and severe working capital deficits indicating a high risk of financial distress.

2. Key Concerns:

• Negative Shareholders' Funds: The company has net liabilities of £3,771 as of 28 February 2024, an improvement from a larger deficit in prior years but still indicative of insolvency on a balance sheet basis.
• Severe Net Current Liabilities: Current liabilities of £502,862 far exceed current assets of £2,961, resulting in a negative net working capital of approximately £499,901. This suggests acute liquidity issues and potential inability to meet short-term obligations.
• Lack of Profit and Loss Disclosure: The directors have elected not to include a profit and loss account in the financial statements, limiting visibility into operational performance and cash flow generation, which are critical to assessing ongoing business viability.

3. Positive Indicators:

• Fixed Assets Growth: Fixed assets have increased substantially from £199,940 in 2023 to £496,415 in 2024, suggesting investment or acquisition of property assets aligned with the company’s real estate activity.
• Compliance with Filing Deadlines: The company is up to date with both accounts and confirmation statement filings, indicating responsible compliance with regulatory requirements.
• Stable Directorship: The board includes three directors appointed since incorporation or early in the company’s life, with no reported disqualifications or compliance issues.

4. Due Diligence Notes:

• Investigate the nature and terms of the significant current liabilities (£502,862) to assess whether these are short-term debts, related party loans, or other obligations, and their impact on solvency.
• Obtain detailed profit and loss information and cash flow statements to evaluate operational sustainability and cash generation ability.
• Ascertain the valuation and liquidity of fixed assets, given their substantial size relative to liabilities, and whether these assets can be leveraged or sold if necessary.
• Review any contingent liabilities or guarantees not disclosed in the micro-entity accounts that could further impact financial stability.
• Confirm the company’s business model viability given negative equity and absence of employees.