Company Number: 12792513

Analysis Date: 2025-07-20 15:19 UTC

1. Risk Rating: MEDIUM
   Justification: CTS Flooring Limited shows an improving liquidity position in the most recent financial year, with net current assets positive at £3,678 compared to a negative figure the prior year. However, the company carries significant long-term liabilities (£7,333) exceeding net assets (£1,428), indicating moderate solvency risk. The small scale, micro-entity status, and absence of employees also suggest limited operational scale which may impact sustainability.

2. Key Concerns:

   • Solvency risk: Net assets are low (£1,428) with long-term liabilities (£7,333) substantially higher, indicating gearing and potential difficulties meeting long-term obligations.
   • Volatility in liquidity: The company moved from negative net current assets (£-1,046 in 2023) to a modest positive (£3,678 in 2024), which warrants monitoring for cash flow stability.
   • Operational scale and sustainability: No employees reported in 2024 (down from 1 in 2023), raising questions about business operations capacity and continuity.

3. Positive Indicators:

   • Improved liquidity in 2024: Shift to positive net current assets suggests better short-term financial management or cash flow improvements.
   • Timely compliance: No overdue accounts or confirmation statements; filings are up to date indicating good governance in regulatory compliance.
   • Active online presence: Website is operational with contact details and social media links, supporting business visibility and marketing efforts.

4. Due Diligence Notes:

   • Review detailed terms and nature of the £7,333 long-term liabilities to assess repayment schedules and covenants.
   • Investigate the cause of employee reduction to zero and assess how operations are currently managed and staffed.
   • Request management accounts or cash flow statements for the most recent period to verify ongoing liquidity and operational performance beyond year-end snapshots.
   • Confirm the business model viability given the small scale and limited asset base, ensuring ongoing trading evidence.