Company Number: SC701583

Analysis Date: 2025-07-20 18:05 UTC

1. Risk Rating: MEDIUM
   The company shows some warning signs in liquidity with net current liabilities in the latest year, but maintains positive net assets and ongoing compliance with filing deadlines. The business is small and relatively new, with limited operational scale, which introduces moderate risk.

2. Key Concerns:

• Liquidity Pressure: As of 30 June 2024, current liabilities (£23,390) exceed current assets (£21,952), resulting in negative net current assets (-£1,438). This signals potential short-term cash flow issues.
• Director Loans: Loans from directors increased to £13,313 (2024) from £7,940 (2023), indicating reliance on director financing which may not be sustainable long-term.
• Low Equity Base and Profitability: Shareholders’ funds have declined from £1,878 (2023) to £392 (2024), showing erosion of equity and limited retained earnings, which may undermine financial resilience.

3. Positive Indicators:

• Timely Compliance: No overdue filings for accounts or confirmation statements demonstrate good regulatory compliance and governance discipline.
• Growth in Fixed Assets: Investment in tangible fixed assets (computer equipment) increased, indicating reinvestment in operational capabilities.
• Stable Revenue Recognition Policy: Accounting policies reflect standard practices for IT consultancy, providing clarity on revenue measurement and asset valuation.

4. Due Diligence Notes:

• Investigate the nature and terms of director loans to assess risk exposure and repayment prospects.
• Review cash flow statements (not provided) to understand operational liquidity beyond balance sheet snapshot.
• Assess contract pipeline and client base stability given the company’s small scale and recent incorporation (2021).
• Confirm absence of any contingent liabilities or off-balance sheet obligations.
• Evaluate dependency on single director for control and financing, considering succession and governance risks.