Company Number: 13556283

Analysis Date: 2025-07-20 15:46 UTC

1. Risk Rating: MEDIUM

   Justification: The company shows signs of operational activity and asset investment but exhibits liquidity stress as of the latest financial year. The net current liabilities position with current liabilities exceeding current assets, mainly trade creditors and director loans, signals potential short-term cash flow challenges. However, net assets and shareholder funds remain positive, implying an underlying equity buffer.

2. Key Concerns:

   • Liquidity Deficit: The company’s current liabilities (£48,210) significantly exceed its current assets (£38,736) in 2024, resulting in negative net current assets (-£9,474). This may impede the company’s ability to meet short-term obligations timely.
   • Rising Creditors and Director Loans: Trade creditors have increased markedly from £970 in 2023 to £22,799 in 2024, alongside director loans rising to £9,478. This suggests dependency on supplier credit and shareholder funding, which could be unsustainable.
   • Unaudited Accounts and Accounting Estimates: The financial statements are unaudited and prepared under small company exemptions, limiting assurance on the accuracy and completeness of reported figures and carrying values, especially with a substantial increase in fixed assets.

3. Positive Indicators:

   • Asset Growth and Investment: Tangible fixed assets increased from £3,048 to £30,750, indicating recent capital investment potentially to support business growth or operational capacity.
   • Stable Net Assets: Despite liquidity pressures, net assets and shareholder funds have remained positive and relatively stable (£21,276 in 2024).
   • Compliance with Filings: The company is current with its statutory filings (accounts and confirmation statements), showing good regulatory compliance and governance practices.

4. Due Diligence Notes:

   • Cash Flow Analysis: Detailed review of cash flow statements and working capital management to understand the liquidity deficit and how the company plans to address it.
   • Trade Creditor Terms: Investigate the terms and aging of trade creditors to assess the risk of supplier pressure or potential defaults.
   • Director Loans: Clarify the nature, terms, and repayment plans of the director loans to evaluate financial dependence on directors.
   • Fixed Assets Valuation: Verify the nature of the significant increase in tangible fixed assets, including any revaluations or capital expenditures, and their impact on future earnings.
   • Profitability and Revenue Trends: Obtain profit and loss accounts and turnover data to assess operational sustainability and growth prospects.
   • Management Background and Strategy: Understand the directors’ plans for business development, cost control, and debt management.