DUMBRACH LTD

Executive Summary

DUMBRACH LTD is a recently formed micro-entity operating in the childcare sector, showing timely compliance but limited financial depth. The company’s minimal equity and tight working capital create moderate liquidity and solvency risks typical for a startup. Further due diligence on cash flow plans and operational readiness is recommended to better assess sustainability.

DUMBRACH LTD - Analysis Report

Company Number: SC789254

Analysis Date: 2025-07-29 14:04 UTC

1. Risk Rating: MEDIUM
   Justification: DUMBRACH LTD is a newly incorporated micro-entity with modest current assets (£18.9k) barely exceeding current liabilities (£16.4k). Shareholders’ funds are minimal (£493), indicating very limited capital buffer. The company is not overdue on filings and appears compliant but the limited financial history and tight working capital position pose moderate solvency and liquidity risks typical for a startup in the childcare sector.

2. Key Concerns:

• Thin Capitalization: Shareholders’ funds of only £493 suggest very limited equity cushion to absorb losses or finance growth.
• Working Capital Tightness: Net current assets of about £2.5k (Current Assets minus Current Liabilities and accruals) indicate marginal liquidity, potentially insufficient to cover unexpected expenses or shortfalls.
• Startup Risk & Limited Track Record: Incorporated late 2023, with only one financial period reported. Lack of historical performance data limits assessment of operational sustainability and cash flow consistency.

3. Positive Indicators:

• Regulatory Compliance: Company is active, not in liquidation, and has filed accounts and confirmation statements on time.
• Stable Ownership & Management: Directors and significant shareholders overlap (two directors each owning 25-50%), which may facilitate aligned governance and decision-making.
• Industry Focus: Child day-care activities (SIC 88910) is a sector with consistent demand, potentially supporting future revenue growth if managed well.

4. Due Diligence Notes:

• Review detailed cash flow projections and budgets to assess near-term liquidity management.
• Investigate any planned capital injections or funding arrangements to bolster equity and working capital.
• Confirm operational permits, insurance, and regulatory compliance specific to childcare operations.
• Evaluate directors’ experience and track record in childcare or related sectors to assess operational capability.
• Monitor subsequent filings for revenue growth, profit margins, and changes in financial structure.