FAERIE STORY LIMITED

Executive Summary

Faerie Story Limited exhibits significant financial distress with persistent negative equity and liquidity deficits over multiple years, raising high risk of insolvency. While regulatory compliance is maintained and leadership stable, operational scale appears minimal and business sustainability uncertain. Further detailed inquiry into liabilities, cash flow, and operational status is warranted to clarify investment risk.

FAERIE STORY LIMITED - Analysis Report

Company Number: 13051950

Analysis Date: 2025-07-20 13:01 UTC

1. Risk Rating: HIGH
   The company shows persistent negative net assets and net current assets over four consecutive years, indicating ongoing solvency and liquidity challenges. The magnitude of current liabilities surpassing current assets by a substantial margin signals significant risk in meeting short-term obligations.

2. Key Concerns:

• Solvency Risk: Shareholders' funds are negative and deteriorating (£-1,812 in 2020 to £-5,083 in 2023), reflecting accumulated losses and an eroded equity base.
• Liquidity Issues: Net current liabilities increased from £-5,687 in 2020 to £-7,020 in 2023, suggesting the company consistently lacks sufficient short-term assets to cover immediate liabilities.
• Operational Scale and Sustainability: The company employs only one person (the director), indicative of a very small operation with limited capacity for scale or diversified income streams. The domain is parked (not actively used), which may point to limited or no current trading activity online despite the SIC code for retail sales via internet/mail order.

3. Positive Indicators:

• Compliance: The company is up to date with its filings—no overdue accounts or confirmation statements, indicating regulatory compliance and governance attention.
• Director Stability: Single director since incorporation, which may imply stable leadership and clear accountability.
• Micro-Entity Status: The company benefits from simplified reporting requirements, reducing administrative burden.

4. Due Diligence Notes:

• Investigate the nature and recovery prospects of current liabilities—who the creditors are and the terms of repayment.
• Assess revenue streams and cash flow generation capacity, especially given the negative net assets and absence of an active website.
• Confirm whether business operations are ongoing or effectively dormant despite active status, including validation of sales and customer base.
• Review director’s plans to restore solvency or intentions regarding the company’s future (e.g., restructuring, capital injection).
• Examine any off-balance sheet liabilities or contingent risks not evident in micro-entity filings.