Company Number: 14175563

Analysis Date: 2025-07-20 11:05 UTC

1. Risk Rating: HIGH
   The company’s financial position at 30 June 2024 shows a significant deterioration with net current liabilities of £4,875 and overall negative net assets of £19,748. This represents a reversal from prior years when net assets were positive (£13,060 in 2023 and 2022). The increased creditors and liabilities exceeding current assets indicate potential solvency and liquidity risks.

2. Key Concerns:

• Negative Net Assets and Working Capital Deficit: The move from positive net assets to a substantial negative figure within one year is a critical red flag, suggesting the company may struggle to meet its obligations as they fall due.
• Rising Creditors and Long-term Liabilities: Creditors due within one year rose sharply from £413 in 2023 to £10,384 in 2024, and creditors due after one year increased to £14,873, indicating increased debt burden without corresponding asset growth.
• Limited Financial Data and Micro Entity Status: As a micro entity with abridged accounts, detailed financial information such as profit/loss, cash flow, and segmental performance is not disclosed, limiting full assessment of operational stability and cash flow sufficiency.

3. Positive Indicators:

• Active Company with No Overdue Filings: The company is active, current on its accounts and confirmation statement filings, showing regulatory compliance and no immediate governance issues.
• Growing Staff Numbers: The average number of employees increased from 2 to 3, which may suggest business growth or increased operational activity.
• Director’s Going Concern Assertion: The director states confidence in sales growth and profitability, and continues to apply the going concern basis in preparation of accounts.

4. Due Diligence Notes:

• Investigate the reasons for the sharp increase in creditors and resulting negative net assets: Obtain management accounts, creditor aging schedules, and cash flow forecasts to assess liquidity management.
• Review directors’ explanation and supporting documentation behind the going concern assertion: Given the adverse balance sheet trend, verify assumptions and evidence supporting ongoing business viability.
• Examine underlying profitability and revenue trends: Since turnover and profit details are not disclosed, request additional financial information to evaluate operational sustainability.
• Confirm any contingent liabilities, related party transactions, or off-balance sheet financing: These may impact solvency but are not visible in abridged accounts.
• Assess director and shareholder background: Check for any adverse conduct records or changes in ownership that might signal governance risks.