Company Number: 12840436

Analysis Date: 2025-07-20 16:41 UTC

1. Risk Rating: MEDIUM
   The company maintains positive net assets and working capital, indicating solvency, but the substantial decline in net assets from £15,596 in 2022 to £7,044 in 2023 suggests deteriorating financial health that warrants caution. Its micro-entity status and limited scale may constrain operational resilience.

2. Key Concerns:

• Declining Net Assets: The net asset base has more than halved in one year, indicating possible operating losses or asset impairments that reduce financial stability.
• Low Fixed Assets Base: Fixed assets have decreased significantly from £1,484 in 2022 to £329 in 2023, which could indicate asset disposals or write-downs impacting operational capacity.
• Limited Financial Disclosure: As a micro-entity, the company files abbreviated accounts without audit, restricting insight into profitability, cash flows, and contingent liabilities.

3. Positive Indicators:

• Positive Working Capital: Net current assets remain positive at £8,725, suggesting the company can meet short-term obligations.
• Up-to-date Filing Status: No overdue accounts or confirmation statements indicate compliance with statutory filing requirements.
• Stable Directorship: The same two directors have been in place since incorporation, providing continuity in management.

4. Due Diligence Notes:

• Investigate Profitability: Review any available management accounts or tax filings to understand the causes behind the net asset decline.
• Assess Cash Flow: Determine if the company is generating sufficient operating cash flow to support ongoing operations given the reduction in fixed assets.
• Confirm Asset Quality: Clarify the nature and valuation of fixed assets and any reasons for their decrease.
• Review Related Party Transactions: Given the small size and director overlap, check for any related party dealings that could affect financial position.