EFFITECH LIMITED

Executive Summary

EFFITECH LIMITED shows high financial risk driven by ongoing negative net assets and a liquidity shortfall, despite compliance with regulatory filings. The absence of fixed assets combined with increasing creditor obligations raises concerns about solvency and operational sustainability. Further detailed financial and operational review is essential before considering investment.

EFFITECH LIMITED - Analysis Report

Company Number: 13825470

Analysis Date: 2025-07-29 13:34 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency concerns as evidenced by negative net assets of £8,239 at the latest year-end and increasing creditor obligations beyond one year. Current liabilities exceed current assets, indicating liquidity pressure. The company’s micro entity status with limited financial history and no fixed assets further heightens operational risk.

2. Key Concerns:

• Persistent negative shareholders’ funds worsening from -£473 to -£8,239 within two years, signaling accumulated losses and potential insolvency risk.
• Current assets (£13,613) insufficient to cover short-term liabilities (£16,896), suggesting liquidity constraints that could impair meeting immediate obligations.
• Significant long-term creditors (£16,896) with no accompanying fixed assets to secure these obligations, raising questions about debt sustainability and refinancing capacity.

3. Positive Indicators:

• The company is compliant with filing obligations, with no overdue accounts or confirmation statements, indicating good regulatory adherence.
• Ownership and control are consolidated under a single director/shareholder, which may facilitate faster decision-making and strategic alignment.
• Employee base is small (average 2 employees), potentially allowing for operational flexibility and lower fixed overheads.

4. Due Diligence Notes:

• Investigate the nature and terms of the long-term liabilities reported to assess repayment schedules, creditor composition, and any potential for restructuring or default risk.
• Review cash flow statements and management accounts (not provided) to better understand operational cash generation and short-term liquidity management.
• Assess the business model sustainability given the continuing negative equity and absence of fixed assets, including any plans for capital injection or profitability improvement.
• Confirm whether the director has any related party transactions or contingent liabilities not reflected in the accounts.
• Evaluate any external factors impacting the engineering consulting sector that could affect future revenue streams.