Company Number: 13100200

Analysis Date: 2025-07-20 14:09 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns as evidenced by a sharp deterioration in net current assets from £2,430 positive in 2022 to a negative £1,406 in 2023, reducing net assets from £4,308 to a mere £96. This indicates a substantial erosion of working capital and equity within one year, raising red flags about financial stability and the ability to meet short-term obligations.

2. Key Concerns:

• Liquidity deterioration: Current liabilities have increased markedly (from £1,531 to £5,080) while current assets have slightly decreased, leading to negative net working capital. This suggests potential cash flow difficulties.
• Erosion of net assets: Shareholders' funds declined from over £4,000 to under £100, indicating losses or write-downs that have almost entirely depleted equity.
• Concentration of control: A single director and shareholder holds 75-100% control. While common in small companies, this may limit governance oversight and increase operational risk.

3. Positive Indicators:

• Compliance with filings: Accounts and confirmation statements are up-to-date with no overdue notices, reflecting good regulatory compliance.
• Micro entity reporting: The company qualifies as a micro entity, which reduces administrative burdens and costs.
• Stable employee base: The number of employees increased slightly from 4 to 7, indicating some operational continuity or growth.

4. Due Diligence Notes:

• Investigate the cause of the drastic increase in current liabilities and whether these are trade creditors, loans, or accruals.
• Review cash flow statements and profit and loss accounts (not publicly filed) to understand sources of losses and assess ongoing profitability.
• Assess the impact of the director’s dual role as sole major shareholder on decision-making and risk management.
• Verify whether the business model combining hairdressing, management consultancy, and retail sales is operationally sustainable or overstretched.
• Confirm absence of related party transactions or contingent liabilities not disclosed in filleted accounts.