Company Number: 12518335

Analysis Date: 2025-07-20 12:22 UTC

1. Risk Rating: MEDIUM
   The company shows a positive net asset position and shareholders’ funds, indicating solvency. However, a notable decline in cash reserves from £671,889 (2023) to £23,711 (2024) and a large portion of current assets tied in trade and other debtors suggests potential liquidity concerns. The company is small, exempt from audit, which limits transparency.

2. Key Concerns:

• Liquidity Risk: Cash at bank has significantly decreased by approximately £648k within one year, despite current assets remaining substantial due to high debtor balances, which may not be easily or quickly converted to cash.
• Debtor Concentration and Credit Risk: Debtors constitute a large portion of current assets (£584k), including £250k due beyond one year, raising questions about collectability and cash flow timing.
• Lack of Audit and Limited Financial Disclosure: As a small company with exemption from audit and no income statement filed, financial transparency and oversight are limited, constraining full risk assessment.

3. Positive Indicators:

• Solvency and Equity Strengthening: Shareholders’ funds increased from £1.41M (2023) to £1.58M (2024), signaling capital support or retained earnings improving net worth.
• Positive Net Current Assets: Despite cash reduction, net current assets remain positive at £291k, reflecting current assets exceed current liabilities.
• Experienced Management Team: Directors include a certified chartered accountant and CTO, indicating professional expertise overseeing finance and operations.

4. Due Diligence Notes:

• Investigate the nature and aging of the trade and other debtors, especially the £250k long-term debtor, to assess recoverability and impact on liquidity.
• Clarify the cause of the sharp reduction in cash reserves during the last financial year and review cash flow forecasts.
• Obtain management accounts or other internal financial reports to better understand profitability, cash generation, and operational sustainability given the absence of an audited income statement.
• Review any related party transactions or advances reflected in debtor balances.
• Confirm compliance with filing deadlines and any potential contingent liabilities not disclosed in the limited filed accounts.