Company Number: 14016920

Analysis Date: 2025-07-29 15:50 UTC

1. Risk Rating: MEDIUM
   Justification: Exchange Hire Ltd is an active private limited company operating in the car rental sector with micro-entity status. The company shows modest net assets (£5,604) and has increased fixed assets over the last year. However, the financials reveal low current assets (£14,507) against relatively high current liabilities (£77,043), suggesting potential liquidity pressure. The company is young (incorporated 2022) and currently managed and controlled by a single director and shareholder, which concentrates control but may pose governance risks.

2. Key Concerns:

• Liquidity Mismatch: The current liabilities significantly exceed current assets by approximately £62,500, which indicates possible short-term cash flow constraints. This raises concerns about the company’s ability to meet immediate obligations.
• Declining Net Assets: Net assets have increased slightly from £4,302 to £5,604, but the reduction in total assets less current liabilities from £35,782 to £15,048, and the increased creditors due after more than one year dropping from £31,480 to £9,444, merit scrutiny to understand changes in debt structure and asset quality.
• Single Director and PSC: The company is wholly controlled by one individual who is also the sole director. While this is not uncommon for small companies, it concentrates operational and governance risk, including decision-making bottlenecks and limited oversight.

3. Positive Indicators:

• Compliance with Filing: The company is up to date with its accounts and confirmation statement filings, indicating good regulatory compliance and governance discipline.
• Asset Growth: Fixed assets increased from £51,708 to £77,584 in the latest year, which could reflect investment in operational capacity.
• Micro-Entity Status: The company benefits from simplified reporting requirements, reducing administrative burden and indicating a smaller, potentially more agile operation.

4. Due Diligence Notes:

• Investigate the nature and terms of current and long-term liabilities to assess repayment schedules and any refinancing risks.
• Review detailed cash flow statements or management accounts (if available) to evaluate liquidity management and operational cash generation.
• Understand the business model's sustainability given the micro size and limited employee count (average of 1), including customer contracts and revenue streams.
• Assess director’s background and any related-party transactions given sole control and directorship.
• Confirm whether the increase in fixed assets is financed by debt or equity and its impact on profitability or depreciation.