Company Number: 13659944

Analysis Date: 2025-07-20 17:56 UTC

1. Risk Rating: MEDIUM
   The company shows a positive net current asset position but with slim working capital (£21,081 in 2023 down from £32,370 in 2022) and a significant increase in current liabilities, particularly amounts owed to group undertakings. The relatively low net assets (£25,814) and declining equity raise moderate solvency risks, though liquidity appears adequate due to high cash balances.

2. Key Concerns:

• High Reliance on Group Funding: Current liabilities include £1.2m owed to group undertakings, more than double from prior year, indicating dependence on intra-group financing which may pose risk if group support weakens.
• Declining Net Assets and Equity: Net assets reduced from £40,275 in 2022 to £25,814 in 2023, showing erosion of shareholder funds possibly due to losses or distributions.
• Limited Operational Scale and Transparency: The company employs only 2 people and operates in video production, a sector with variable cash flows. Financial statements are unaudited and limited in disclosure, restricting full assessment of operational stability.

3. Positive Indicators:

• Strong Cash Position: Cash at bank increased substantially to £1.26m, providing liquidity to meet short-term obligations.
• Timely Filings and Compliance: Accounts and confirmation statements are up to date with no overdue filings or compliance issues noted.
• Going Concern Affirmed: Director’s report confirms the company is considered a going concern with adequate resources for foreseeable future.

4. Due Diligence Notes:

• Review the nature and terms of intra-group loans and repayment expectations to assess refinancing or demand risk.
• Obtain profit and loss details to understand reasons behind equity decline and assess operational profitability.
• Investigate any contingent liabilities or off-balance sheet commitments not disclosed in summary accounts.
• Confirm any related party transactions and their impact on financial stability.
• Assess customer concentration risk and contract stability in the video production sector.