Company Number: 13196274

Analysis Date: 2025-07-29 17:26 UTC

1. Risk Rating: HIGH
   The company exhibits a high risk profile primarily due to negative net current assets, a significant decline in net assets over one year, and substantial director loans, which collectively raise concerns about solvency and liquidity.

2. Key Concerns:

• Negative Net Current Assets: As of 29 February 2024, net current liabilities stand at £32,395, reflecting an inability to cover short-term liabilities with current assets, which may impair operational liquidity.
• Dramatic Decline in Net Assets: Net assets fell sharply from £59,223 in 2023 to £950 in 2024, indicating significant erosion of equity and retained profits, potentially signaling operational losses or asset impairments.
• High Director Loans: Loans from directors amount to £94,411, representing over half of current liabilities. Reliance on director funding can be a red flag if not adequately documented or sustainable.

3. Positive Indicators:

• Timely Filing and Compliance: The company is up to date with its accounts and confirmation statement filings, indicating regulatory compliance and good governance practices.
• Tangible Fixed Assets Growth: Net book value of tangible fixed assets increased from £31,955 to £33,345, suggesting ongoing investment in operational capacity.
• Consistent Management Team: The same two directors have been in place since incorporation, which may provide managerial stability.

4. Due Diligence Notes:

• Investigate the nature and terms of the director loans to assess whether these are repayable on demand or have extended terms that could affect liquidity risk.
• Review the profit and loss account (not filed publicly) to understand the drivers of the significant decline in retained earnings and net assets.
• Assess the company's cash flow statements and forecasts to determine operational sustainability and ability to meet short-term obligations given negative working capital.
• Confirm if there are any contingent liabilities or off-balance-sheet obligations not reflected in the accounts.
• Evaluate customer concentration and debtor aging to understand credit risk exposure given the increase in debtors and accrued income.