CROSSHIRE LIMITED

Risk Rating: LOW The company demonstrates a solid financial trajectory with strong profitability, a healthy net asset position, and minimal leverage. However, the rating is tempered slightly by liquidity concerns regarding the composition of current assets and a historical drawdown in cash reserves. The business is long-established and compliant with its filing obligations, suggesting operational stability.

Key Concerns: - Cash Depletion Trend: Cash at bank has decreased significantly from £69,929 in 2021 to £7,864 in 2025. While the most recent year shows a slight recovery from the 2024 low of £2,013, the overall trend represents a substantial reduction in immediately available liquid funds. - Concentration in "Other Debtors": Current assets are heavily reliant on debtors (£83,331), of which £60,852 is categorized as "Other debtors" rather than trade debtors (£22,479). The nature, collectability, and relationship of these "other debtors" are critical, as the company's liquidity depends heavily on these balances being realized. - Minimal Share Capital: The company has only £2 in called-up share capital, meaning the equity base is comprised almost entirely of accumulated profit and loss reserves. While common for long-standing private companies, it means the business has limited permanent capital buffer beyond retained earnings.

Positive Indicators: - Strong Net Asset Growth: Net assets have grown significantly from £24,055 in 2022 to £76,191 in 2025, reflecting robust profitability and successful retention of earnings within the business over recent periods. - Low Leverage: Current liabilities are modest at £18,628 against current assets of £91,195, yielding a healthy current ratio of approximately 4.9. There is no visible long-term debt on the balance sheet. - Longevity and Compliance: Incorporated in 1987, the company has a long operating history. It is fully compliant with Companies House filing requirements, with no overdue documents, and accounts are filed under the small companies regime appropriately.

Due Diligence Notes: - Investigate "Other Debtors": Clarify the composition of the £60,852 classified as "Other debtors." Determine if these are related-party transactions, inter-company balances, or specific non-trade receivables, and assess the likelihood and timeframe for recovery. - Cash Flow Reconciliation: Request a cash flow statement or further explanation to understand the divergence between reported profitability (evidenced by growing P&L reserves) and the sharp decline in cash reserves over the 2021-2024 period. - Clarification of Principal Activity: The latest filed accounts explicitly state "No description of principal activity," which contrasts with the registered SIC code (68320 - Management of real estate on a fee or contract basis). Verify the actual trading activity to ensure it aligns with the real estate management classification and the reported fixed assets. - Director Loan Review: Note the small director's loan balance (£1,637 owed by director R L Heginbotham). Ensure this is documented formally and reviewed for compliance with the Companies Act regarding loans to directors.