Company Number: 12951186

Analysis Date: 2025-07-20 11:55 UTC

1. Risk Rating: MEDIUM

The company maintains a positive net asset position and has filed accounts on time, which are positive indicators. However, the significant decline in net assets and net current assets in 2024 compared to prior years raises concerns about financial stability and liquidity.

2. Key Concerns:

• Substantial reduction in net assets from £110,913 in 2023 to £24,717 in 2024, indicating erosion of equity.
• Sharp drop in cash reserves from £133,254 in 2023 to £26,529 in 2024, posing potential liquidity risks.
• Decrease in debtors by approximately £66,000 but increase in trade creditors from £162,678 to £94,232—although decreased, creditors remain high relative to assets—potential strain on working capital.

3. Positive Indicators:

• The company remains active with no overdue filings, indicating compliance with regulatory requirements.
• Positive net current assets of £25,006 and positive shareholders’ funds, albeit reduced.
• The director has been in place since incorporation with no apparent disqualifications; related party control is transparent.
• Operating in a specialized wholesale sector (household goods), which may support niche demand.

4. Due Diligence Notes:

• Investigate reasons behind the sharp decline in net assets and cash balances in 2024; assess if this is due to extraordinary expenses, impairments, or operational downturn.
• Review the aging profile and collectability of trade debtors, especially given the significant decrease.
• Verify the nature and terms of bank borrowings (£12,462 total) and their impact on liquidity.
• Examine stock valuation and turnover, as inventory increased to £29,000, which may affect cash flow.
• Confirm if the company has any contingent liabilities or off-balance sheet obligations not reflected in accounts.
• Assess revenue and profitability trends as Profit & Loss data was not provided.
• Review director remuneration in relation to company profitability and cash flow.