Company Number: 12830939

Analysis Date: 2025-07-20 16:19 UTC

1. Risk Rating: HIGH
   The company exhibits significant deterioration in liquidity and net assets over the most recent financial year, raising concerns about its ability to meet short-term obligations and overall financial stability.

2. Key Concerns:

• Liquidity Decline: Cash reserves dropped sharply from £45,403 in 2022 to £3,726 in 2023, while current liabilities remain high at £10,617, resulting in barely positive net current assets of £225 as at August 2023. This suggests potential cash flow stress.
• Shrinking Net Assets: Net assets have decreased dramatically from £31,508 in 2022 to only £346 in 2023, indicating erosion of equity and potential losses affecting solvency.
• Director Loans: The presence of director loans amounting to £6,768 as a creditor raises questions regarding the company’s reliance on related party funding and the sustainability of its capital structure.

3. Positive Indicators:

• Timely Filings: The company is up to date with its accounts and confirmation statement filings, indicating regulatory compliance and good governance in this respect.
• Stable Ownership and Management: The company has a single director since incorporation with no reported disqualifications or changes, suggesting continuity in management.
• Small Entity Reporting: The company files under the small companies regime with exemption from audit, which is consistent with its size and turnover category.

4. Due Diligence Notes:

• Investigate the reasons behind the sharp decline in cash and net assets between 2022 and 2023, including any extraordinary expenses or revenue losses.
• Review the terms and conditions of director loans to assess repayment risk and potential impact on creditor hierarchy.
• Examine the debtor ledger to evaluate collectability of the £7,116 trade debtors recorded at 2023 year-end.
• Confirm the company’s revenue trends and profitability given the lack of turnover data in the accounts summary.
• Assess operational cash flows and working capital management practices to determine ongoing liquidity risk.