DENISE'S DEN LIMITED

Executive Summary

Denise's Den Limited is currently experiencing financial distress marked by negative working capital and shareholders' funds, raising significant solvency and liquidity concerns. Despite maintaining compliance with filing requirements and having stable management, the company’s operational scale appears minimal, and its financial sustainability is questionable without further operational or financial intervention.

DENISE'S DEN LIMITED - Analysis Report

Company Number: SC672374

Analysis Date: 2025-07-20 16:15 UTC

1. Risk Rating: HIGH
   The company shows persistent negative net current assets and has moved into negative shareholders’ funds in the most recent year, indicating financial distress and potential solvency issues.

2. Key Concerns:

• Negative Net Current Assets: The company’s working capital position is significantly negative at £-3,121 (2024), worsening from previous years, indicating liquidity stress and difficulty meeting short-term obligations.
• Negative Shareholders’ Funds: The equity position has deteriorated from positive £346 (2023) to negative £-1,248 (2024), suggesting accumulated losses or write-downs impacting solvency.
• No Employees and Minimal Capital: The company reports no employees and has nominal share capital (£2), which could indicate limited operational scale and financial buffer.

3. Positive Indicators:

• Timely Filing and Compliance: Accounts and confirmation statements are up to date with no overdue filings, reflecting regulatory compliance.
• Stable Directorship: The same two directors have been in place since incorporation, indicating management continuity.
• Micro-Entity Reporting: The company is a micro entity, which reduces reporting complexity and cost, appropriate for a small-scale operation.

4. Due Diligence Notes:

• Cash Flow and Profitability Trends: Investigate management accounts or cash flow statements to assess operational cash generation and causes of equity deterioration.
• Creditors Composition: Analyze the nature and maturity of current liabilities to understand repayment risks and creditor pressure.
• Business Model Viability: Clarify whether the company is trading actively given no employees and its SIC code (hairdressing and beauty treatment), and whether it relies on external resources or outsourcing.
• Directors’ Plans: Obtain insights on directors’ plans for financial recovery or restructuring, given the negative net assets.
• Related Party Transactions: Examine if any transactions with directors or related parties might affect financial position or risk.