Company Number: SC681697

Analysis Date: 2025-07-19 12:34 UTC

1. Risk Rating: MEDIUM
   The company shows modest net assets and positive working capital, indicating basic solvency and liquidity. However, a significant increase in long-term creditors alongside declining net assets raises caution about financial stability and potential reliance on debt.

2. Key Concerns:

• Rising Long-Term Liabilities: Creditors due after more than one year increased from £22,709 in 2022 to £38,170 in 2023, a 68% rise, which may suggest increased borrowing or deferred payments that could pressure future cash flows.
• Declining Net Assets: Net assets decreased from £29,010 in 2022 to £20,342 in 2023, indicating potential erosion of equity and profitability concerns.
• Minimal Scale and Staffing: With only one employee (the director) and micro-entity reporting, the company’s operational capacity and resilience may be limited, raising questions about sustainability and growth potential.

3. Positive Indicators:

• Positive Net Current Assets: The company maintains a healthy current ratio (current assets exceed current liabilities by about £39,662), suggesting the ability to meet short-term obligations.
• Timely Filings and Compliance: No overdue accounts or confirmation statements, indicating good regulatory compliance and governance discipline.
• Stable Fixed Assets: Fixed assets remain constant at £18,850, reflecting consistent investment levels without impairment.

4. Due Diligence Notes:

• Investigate the nature and terms of the increased long-term creditors to assess repayment obligations and interest costs.
• Review profit and loss trends and cash flow statements to understand drivers of net asset decline and operational cash generation.
• Confirm the company’s order book, client base, and contracts given the small employee base to evaluate business sustainability.
• Examine director’s background and any related party transactions given sole directorship and minimal staffing.
• Check for contingent liabilities or off-balance-sheet commitments not disclosed in the micro-entity accounts.