DAWN CHORUS FILMS LIMITED

Executive Summary

Dawn Chorus Films Limited exhibits high financial risk characterized by significant and growing net liabilities and negative working capital. While the company remains compliant with statutory filings, it is heavily reliant on director loans for liquidity, raising concerns about solvency and operational sustainability. Further scrutiny of funding arrangements and business prospects is recommended before investment consideration.

DAWN CHORUS FILMS LIMITED - Analysis Report

Company Number: 12900016

Analysis Date: 2025-07-29 13:23 UTC

1. Risk Rating: HIGH
   This rating is driven by the company’s persistent and increasing net liabilities, negative net current assets, and reliance on director loans to finance operations. The balance sheet shows significant solvency risk given the large and growing deficit in shareholder funds and working capital.

2. Key Concerns:

• Solvency and Net Liabilities: The company’s net liabilities have increased from approximately £52k in 2024 to £80k in 2025, indicating worsening financial health and an inability to cover all liabilities with assets.
• Liquidity and Working Capital: Negative net current assets of £80k suggest the company cannot meet short-term obligations from current assets, heightening risk of default on payables.
• Dependency on Director Support: Over £55k of current liabilities are director loan accounts that are unsecured, interest-free, and repayable on demand, highlighting a reliance on director goodwill to sustain operations rather than operational cash flow.

3. Positive Indicators:

• Compliance and Filing: The company is up to date on all statutory filings, including accounts and confirmation statements, indicating adherence to regulatory requirements.
• Small Employee Base: With only 2 employees, the company likely maintains low fixed costs, which may assist in managing cash outflows.
• Going Concern Statement: Directors have confirmed intent to support the company for at least 12 months, which provides some short-term assurance on business continuity.

4. Due Diligence Notes:

• Investigate the nature and terms of the director loan accounts, including any potential for conversion to equity or formal repayment plans.
• Review operational cash flows and revenue generation capacity given the very low cash balances and high liabilities.
• Examine management’s plans to address the net liability position and whether external funding or restructuring is anticipated.
• Confirm no contingent liabilities or regulatory issues are unreported that could exacerbate financial strain.
• Assess the company’s business model viability given the ongoing losses and liabilities, particularly in the motion picture production sector which can be capital intensive.