Company Number: NI667994

Analysis Date: 2025-07-29 20:54 UTC

1. Risk Rating: LOW
   EQ CONTRACTS LTD demonstrates solid financial health with increasing net assets, strong net current assets, and a robust cash position. The company is compliant with filing deadlines and shows steady profit growth, indicating low solvency and liquidity risk.

2. Key Concerns:

• Concentration of Control: Two individuals each hold 25-50% share ownership, which could pose governance risks if disagreements arise.
• Director Advances: The director has a material outstanding balance (£19,971) owed to the company, which requires monitoring for potential related party risks.
• Tax Liabilities: Corporation tax creditors have increased significantly (£79,055 in 2025), indicating sizeable tax obligations that must be managed carefully.

3. Positive Indicators:

• Strong Liquidity: Cash at bank (£400,436) and net current assets (£366,274) comfortably exceed current liabilities, indicating capacity to meet short-term obligations.
• Profitability and Equity Growth: Consistent profits (£236,701 in 2025) and rising shareholders’ funds (£458,228) over recent years show operational stability and retained earnings growth.
• Filing Compliance: No overdue accounts or confirmation statements, showing good regulatory compliance and governance.
• Asset Base Growth: Fixed assets have increased substantially (from £52,201 to £91,954), reflecting investment in operational capacity.

4. Due Diligence Notes:

• Verify the nature and terms of the director’s advances to confirm there are no conflicts or risks to company cash flow.
• Review tax payment schedules and any potential deferred tax liabilities to assess timing and impact of tax obligations.
• Assess related-party transactions and governance policies due to concentrated ownership to ensure transparency and risk mitigation.
• Confirm stability of revenue streams given the company operates in joinery installation, a sector sensitive to economic cycles.