Company Number: 13884100

Analysis Date: 2025-07-29 20:24 UTC

1. Risk Rating: MEDIUM
   The company shows positive net assets and shareholder funds improving year-on-year, indicating a strengthening equity base. However, the significant finance lease and hire purchase liabilities, alongside relatively modest current assets and low debtor balances, present some liquidity risks. The company’s small size and limited employee base also suggest operational scale constraints.

2. Key Concerns:

• Finance Lease and Hire Purchase Obligations: The company carries substantial long-term liabilities (£39,623) from finance leases and hire purchase contracts, which could strain cash flows given current asset levels.
• Low Debtor Balances: Debtors have decreased markedly from £5,739 in 2023 to £816 in 2024, potentially signaling slower customer payments or lower sales on credit, impacting cash conversion.
• Small Scale and Limited Operating History: Incorporated in 2022 with only two employees, the company’s operational track record is short, which may limit its resilience and ability to absorb shocks or scale operations.

3. Positive Indicators:

• Improved Net Assets: Net assets increased from £3,962 in 2023 to £17,478 in 2024, showing enhanced equity possibly through retained earnings or improved profitability.
• Adequate Working Capital: Despite liabilities, net current assets remain positive (£9,633), supported by a healthy cash balance (£20,951) as at 2024 year-end.
• Timely Regulatory Compliance: The company is current with all filing and confirmation statement deadlines, indicating good governance and regulatory adherence.

4. Due Diligence Notes:

• Review detailed cash flow statements and profit and loss accounts (not filed publicly) to assess operational cash generation and the impact of finance lease payments on liquidity.
• Investigate the nature and terms of the finance lease and hire purchase contracts to understand the timing and magnitude of future obligations.
• Examine customer concentration and credit control policies given the drop in debtor balances to assess revenue stability and collection efficiency.
• Consider the directors’ plans for growth and risk mitigation given the company’s small scale and nascent operational history.