Company Number: 14194011

Analysis Date: 2025-07-29 15:31 UTC

1. Risk Rating: HIGH
   Justification: Despite showing a positive net asset position at the latest year end (June 2024), the company’s balance sheet reveals significant liquidity stress with very low current assets (£135 cash, no debtors) compared to current liabilities (£16,532). The prior years showed negative net assets and shareholders’ funds, indicating prior financial distress. Reliance on a director’s loan account as a major creditor suggests external funding dependency rather than operational cash flow sufficiency.

2. Key Concerns:

• Liquidity Deficit: Net current liabilities of £16,397 at June 2024 indicate that short-term obligations exceed easily realizable assets, posing potential cash flow challenges to meet immediate liabilities.
• Reliance on Director’s Loan: £15,687 of current liabilities is classified as a director’s loan account, implying external funding support which may not be sustainable or formalized as a long-term financing solution.
• Prior Losses and Negative Equity: Historical losses reflected in negative net assets in 2022 and 2023 (-£8,171) raise questions about ongoing profitability and financial recovery trajectory.

3. Positive Indicators:

• Recent Return to Positive Equity: The company reported positive net assets (£2,503) and shareholders’ funds (£2,403) in 2024, showing a partial turnaround from previous deficits.
• Asset Base Stability: Tangible fixed assets have increased slightly from £18,000 to £18,900, indicating some investment in operational capacity.
• Compliance and Timely Filings: No overdue accounts or confirmation statements, demonstrating regulatory compliance and governance discipline.

4. Due Diligence Notes:

• Investigate the nature and terms of the director’s loan account: repayment schedules, interest, and whether it is likely to be called in short term.
• Review cash flow statements and bank reconciliations if available to assess operational cash flow generation and working capital management.
• Examine turnover and profitability trends in more detail (not disclosed here) to understand if the company is moving towards sustainable earnings.
• Clarify any contingent liabilities or off-balance sheet obligations that might impact solvency.
• Confirm whether the company has access to external credit facilities or other liquidity sources beyond the director’s loan.