Company Number: SC679915

Analysis Date: 2025-07-29 20:35 UTC

1. Risk Rating: LOW

Justification: Faolchu Ltd exhibits strong net current assets and net asset positions with current liabilities significantly lower than current assets. The company’s financial statements are up to date with no overdue filings. There is no indication of insolvency or liquidation. Although the business is small and unaudited, the financial data suggests sound solvency and liquidity.

2. Key Concerns:

• Decreasing current assets and cash balances in the latest year compared to prior years could indicate tightening liquidity.
• High debtor balances relative to cash, with a significant portion categorized as “other debtors” rather than trade debtors, warrant scrutiny for collectability.
• Related party transactions with John Galvin Design Ltd, including advances and management fees, require review to ensure arm’s length terms and no undue financial risk.

3. Positive Indicators:

• Net current assets remain healthy at £92,526 as of August 2024, indicating good short-term financial stability.
• Current liabilities are low (£3,983), suggesting limited short-term obligations.
• Shareholders’ funds and net assets remain stable around £93k, reflecting consistent equity backing.
• No overdue statutory filings or compliance issues noted; company status is active.
• Modest employee count (5) may contribute to manageable operational costs.

4. Due Diligence Notes:

• Investigate the nature and aging of “other debtors” (£73,478) to assess likelihood of collection and impact on liquidity.
• Review the terms and ongoing relationship with John Galvin Design Ltd for related party transactions and potential dependency or risk concentration.
• Confirm cash flow trends and working capital cycle given reduction in overall current assets and cash year-on-year.
• Understand the company’s revenue and profitability dynamics, which are not disclosed, to assess operational sustainability.
• Verify directors’ background and governance practices, noting no disqualifications or adverse records reported.