Company Number: 13121014

Analysis Date: 2025-07-19 12:53 UTC

1. Risk Rating: MEDIUM
   The company shows a recent recovery in net current assets and net assets after a prior period of negative working capital and minimal equity. However, the low absolute asset base and fluctuations in liquidity suggest moderate solvency risk.

2. Key Concerns:

• Liquidity Fluctuations: The company had negative net current assets (£-418) in the prior two years, indicating potential short-term cash flow stress before improving to £8,774 in the latest year. This volatility raises concern about ongoing liquidity management.
• Low Asset and Equity Base: Total net assets rose to £8,070 but remain low, limiting financial buffer against adverse events or business downturns.
• Single Director and Employee: With only one director and one employee (the director), there may be operational vulnerability and limited capacity for business continuity or scaling.

3. Positive Indicators:

• Improved Working Capital Position: The latest financial year shows a positive net current asset position, suggesting the company is currently able to meet short-term obligations.
• Up-to-date Filings: No overdue accounts or confirmation statements indicate compliance with regulatory requirements and good governance practices.
• Consistent Business Focus: The company operates in a regulated sector (health care, education, social services), which typically involves stable demand and potential for sustainable operations.

4. Due Diligence Notes:

• Review cash flow statements (not provided) to assess operational cash generation and timing of receivables/payables.
• Investigate the cause of prior negative working capital and how liquidity has been restored in the latest period.
• Understand the business model and client base to evaluate revenue stability, especially given the small team size.
• Verify any contingent liabilities or off-balance sheet commitments that could impact solvency.
• Confirm the director’s capacity and plans for business development or succession to mitigate operational risk.