Company Number: SC717038

Analysis Date: 2025-07-20 16:47 UTC

1. Risk Rating: MEDIUM
   The company shows positive net assets and shareholder equity growth but reveals a recent liquidity concern with negative net current assets in 2024. The business is very small (micro entity) with limited operating history, increasing uncertainty regarding operational stability.

2. Key Concerns:

• Negative net current assets in 2024 (£-2,427) indicate potential short-term liquidity risk despite positive net assets overall.
• The company has only one employee (the director), which suggests operational dependency on a single individual and limited capacity for scaling or managing risk.
• Limited financial history (since incorporation in late 2021) restricts the ability to assess long-term profitability and cash flow trends.

3. Positive Indicators:

• Net assets and shareholders’ funds increased significantly from £14,736 in 2023 to £27,473 in 2024, indicating growth in retained earnings or equity injections.
• No overdue filings for accounts or confirmation statements, indicating compliance with regulatory requirements.
• Industry classification (electrical installation) is a service area with steady demand, potentially supporting business continuity.

4. Due Diligence Notes:

• Investigate the cause of the negative net current assets in 2024 to assess if this is a temporary timing issue or indicative of ongoing cash flow problems.
• Review detailed profit and loss statements and cash flow reports to evaluate operational sustainability and profitability trends.
• Confirm the director’s plans for business growth or risk mitigation given the single-employee operational model.
• Verify any related party transactions or equity injections that contributed to the rise in net assets.
• Assess the company’s client base and contract stability to determine revenue reliability.