DOORSTEP FIREWOOD LTD

Executive Summary

Doorstep Firewood Ltd exhibits significant solvency and liquidity concerns with negative net assets and current liabilities exceeding current assets. Despite compliance with filing requirements and active governance, the business appears financially strained with limited operating history. Further inquiry into cash flows, profitability, and business viability is recommended before considering investment exposure.

DOORSTEP FIREWOOD LTD - Analysis Report

Company Number: 14114143

Analysis Date: 2025-07-29 20:26 UTC

1. Risk Rating: HIGH
   The company's financials reveal net current liabilities and negative net assets, indicating solvency concerns. As a micro-entity with limited financial resources and a short operating history (incorporated 2022), this raises a high risk of inability to meet obligations.

2. Key Concerns:

• Negative net current assets of £(1,644) and negative shareholders' funds of £(2,540) as of 31 May 2024 indicate a balance sheet deficit.
• Accruals and deferred income of £900 further worsen the net liability position.
• The company employs 4 people but has minimal current assets (£7,600), suggesting potential cash flow constraints.

3. Positive Indicators:

• Up-to-date filings with no overdue accounts or confirmation statements shows compliance with Companies House requirements.
• Directors appear engaged and have formally approved accounts, demonstrating governance adherence.
• As a private limited company, limited liability protects shareholders beyond invested capital.

4. Due Diligence Notes:

• Investigate the cause of the deterioration from net assets of £4 in 2022 to negative £2,540 in 2024, focusing on operational cash flow and profitability.
• Review cash flow statements or management accounts if available to assess liquidity and ability to cover short-term liabilities.
• Assess the business model and market position given the SIC code (47190 - other retail sale in non-specialised stores) to understand sustainability and growth prospects.
• Confirm whether any related party transactions or director loans exist that may impact financial stability.
• Verify whether any contingent liabilities or pending obligations could exacerbate solvency risk.