ETERNA HOME LIMITED

Executive Summary

ETERNA HOME LIMITED shows signs of financial stress with a marked deterioration in liquidity and net asset position at the 2024 year-end. While regulatory compliance is maintained and there is ongoing investment in intangible assets, potential solvency and cash flow concerns warrant further investigation. Close monitoring of working capital and creditor arrangements is advised to ascertain ongoing financial viability.

ETERNA HOME LIMITED - Analysis Report

Company Number: 13558595

Analysis Date: 2025-07-29 19:11 UTC

1. Risk Rating: HIGH
   The company exhibits a vulnerable financial position at the latest year-end, with net current liabilities of £10,097 and net assets reduced sharply to £1,024 from £6,437 the prior year. This signals solvency strain and potential liquidity risk given that current liabilities substantially exceed current assets.

2. Key Concerns:

• Liquidity Shortfall: The cash balance increased slightly to £7,994 but remains modest relative to current liabilities of £18,542, indicating potential short-term cash flow constraints.
• Declining Net Assets: A significant erosion of net assets from £6,437 to £1,024 within one year raises concerns on capital adequacy and ongoing financial stability.
• Dependence on Group and Director: The company owes no amounts to group undertakings as of the latest year, but prior year receivables were £27,899. The ultimate controlling party is closely held, which may limit external oversight and increase governance risk.

3. Positive Indicators:

• No Overdue Filings: Both accounts and confirmation statement filings are up to date, indicating regulatory compliance and good governance practices in this respect.
• Active Website and Market Presence: The company maintains an active website and provides contact details, supporting operational continuity and customer engagement in the retail furniture niche.
• Intangible Asset Investment: Increase in intangible assets (software) from £4,500 to £11,121 suggests some investment in technology or systems that may support operational efficiency.

4. Due Diligence Notes:

• Investigate the underlying causes of the sharp decline in net assets and net current assets—particularly whether losses have been incurred or liabilities increased significantly.
• Review cash flow forecasts and working capital management strategies to assess short-term liquidity risk and ability to meet obligations as they fall due.
• Confirm the nature and terms of bank loans and other creditors, including any covenants or repayment schedules that could impact solvency.
• Assess the role of the ultimate parent company and director in providing financial support or guarantees to the company.
• Evaluate operational performance, sales trends, and market conditions in the specialised furniture retail sector to gauge sustainability.