Company Number: 13576078

Analysis Date: 2025-07-20 15:37 UTC

1. Risk Rating: MEDIUM
   The company shows a solid net asset position and positive net current assets, indicating solvency. However, there is a significant reduction in cash and a large debtor balance represented mainly by a director’s loan account, which raises concerns about liquidity and reliance on related-party financing.

2. Key Concerns:

• Liquidity Risk: Cash holdings dropped sharply from £158k in 2023 to just £1.3k in 2024, potentially indicating cash flow constraints despite overall current assets being positive.
• Related Party Exposure: Debtors of £69.9k are largely composed of director’s loan account balances, which are unsecured and interest-free, suggesting possible cash flow dependency on director financing rather than operating cash generation.
• Declining Net Assets: Net assets decreased from £91.6k in 2023 to £67.1k in 2024, a 27% drop within one year without explanation, which might indicate operating losses or asset write-downs that could undermine long-term stability.

3. Positive Indicators:

• Solvency: Net current assets remain positive (£65.7k) and net assets are healthy relative to the company's size, indicating the company can meet short-term liabilities.
• Compliance and Filing: The company is current on filing its accounts and confirmation statement, demonstrating good regulatory compliance and governance.
• Stable Ownership and Management: Single director and 100% ownership by Mr Anand Patel, with no indication of director disqualifications, provides clear control and responsibility.

4. Due Diligence Notes:

• Investigate the nature and collectability of the director’s loan account within debtors, including repayment terms and the director’s financial capacity to support the company.
• Review the reasons for the significant cash depletion between 2023 and 2024 to assess operational cash flow sufficiency and any unusual financing or investing activities.
• Examine profit and loss data (not filed) to understand the cause of the decrease in net assets and whether the company is generating sustainable profits or incurring losses.