EUREKA SPACES LTD

Executive Summary

Eureka Spaces Ltd shows a concerning liquidity and solvency profile due to a large negative working capital and substantial creditor obligations relative to limited equity. While the investment property assets provide some underlying value, the company’s ability to meet near-term liabilities and sustain operations warrants careful scrutiny. Compliance with filing requirements is positive, but further examination of creditor terms and asset realizability is recommended.

EUREKA SPACES LTD - Analysis Report

Company Number: 13198926

Analysis Date: 2025-07-29 20:02 UTC

1. Risk Rating: HIGH
   The company exhibits significant liquidity risk with current liabilities far exceeding current assets, resulting in a large negative working capital position. Additionally, the high level of creditor obligations both within and beyond one year presents solvency concerns despite holding investment property assets.

2. Key Concerns:

• Negative Net Current Assets: As of 31 March 2024, current liabilities are £271,238 versus current assets of only £22,379, producing a net current liability of £-248,859 which pressures short-term liquidity.
• High Long-Term Creditors and Deferred Tax: Creditors due after one year total £220,330 and deferred tax liabilities are £23,860, indicating substantial obligations that may strain future cash flows.
• Limited Historical Profitability and Small Equity Base: Shareholders’ funds stand at only £26,951 despite the substantial investment property asset value, reflecting limited retained earnings and possible reliance on external financing.

3. Positive Indicators:

• Investment Property Asset Base: The company holds investment properties valued at £520,000, which is a tangible asset that may support borrowing capacity or be realized if needed.
• No Overdue Filings: The company has filed accounts and confirmation statements on time, indicating compliance with statutory requirements and no immediate regulatory red flags.
• Single Director with Control: Ownership and control by a single person can facilitate decisive management and streamlined decision-making.

4. Due Diligence Notes:

• Investigate the nature and terms of creditor balances, especially the large short-term and long-term amounts, to assess repayment schedules and covenants.
• Confirm the valuation methodology and marketability of the investment property assets to understand their liquidity and potential to cover liabilities.
• Review cash flow forecasts and business plans to evaluate how the company intends to manage its significant working capital deficit and service debt.
• Examine any related party transactions or director loans, given the sole director’s control and potential influence on financing.
• Assess any contingent liabilities or off-balance sheet obligations not disclosed in the accounts.