Company Number: 12923065

Analysis Date: 2025-07-29 17:41 UTC

1. Risk Rating: MEDIUM
   Despite the company showing net positive assets and shareholders' funds of £7,044 as of 31 March 2024, the relatively small scale (micro entity), narrow equity base, and thin net current asset margin (£1,561) indicate moderate solvency risk. The company’s current liabilities nearly match its current assets, suggesting limited liquidity headroom.

2. Key Concerns:

• Liquidity Tightness: Current assets (£838,427) and current liabilities (£840,701) are nearly equal, with a very slim net current asset buffer, which could present short-term cash flow challenges.
• Small Equity Base: Share capital is nominal (£1.00), and shareholders' funds, while positive, remain low (£7,044), limiting the company’s ability to absorb financial shocks.
• Operational Scale & History: Incorporated in 2020, with limited financial history and only three employees reported in the latest year, the company remains at an early growth stage, raising concerns about operational sustainability and market resilience.

3. Positive Indicators:

• Improved Financial Position: Significant improvement in net assets from previous years (negative or very low) to a positive £7,044 in 2024 suggests business growth or capital injections.
• Compliance & Filing: Accounts and confirmation statements are filed on time with no overdue filings, indicating good regulatory compliance and governance standards.
• Active Business Status: The company remains active with no liquidation or administration status, and has a functioning website and contact details, supporting operational continuity.

4. Due Diligence Notes:

• Review cash flow statements and working capital management to understand the company’s ability to meet short-term obligations given the tight current asset to liability ratio.
• Investigate the nature and reliability of current assets (£838k), as large current assets with matching liabilities may include receivables or inventory that could affect liquidity.
• Assess revenue streams, profitability trends, and customer concentration to gauge operational stability and growth prospects beyond the balance sheet.
• Verify any contingent liabilities or off-balance-sheet exposures that might impact solvency.
• Confirm director background and any related party transactions given sole director and small company status.