FASHION DISTRICT LIMITED

Executive Summary

Fashion District Limited is a very young micro-entity showing early signs of financial improvement but remains exposed to risks from low equity and significant long-term liabilities. Its regulatory compliance is sound, but operational scale and cash flow stability require further investigation. Investors should closely examine debt terms and business model viability before committing capital.

FASHION DISTRICT LIMITED - Analysis Report

Company Number: 14433021

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

1. Risk Rating: MEDIUM
   The company shows improvement from a previous net liability position to positive net assets, indicating some financial recovery. However, the presence of long-term creditors and relatively modest net assets for a company incorporated recently suggest moderate solvency and liquidity risks that warrant attention.

2. Key Concerns:

• Long-term Liabilities: The company has £11,192 in creditors due after more than one year, which is significant relative to its net assets of £9,652, indicating potential future cash outflows that may strain financial resources.
• Thin Equity Base: Shareholders’ funds stand at £9,652, which is low and may limit the company’s ability to absorb losses or finance growth internally.
• Limited Operating History and Scale: Incorporated in late 2022, with only one employee and micro-entity accounting, the company’s operational track record is limited, which increases uncertainty regarding sustainable cash flows and business stability.

3. Positive Indicators:

• Improvement in Net Current Assets: From a negative £384 to positive £16,955 over two years, demonstrating progress in managing working capital.
• Timely Filing and Compliance: Accounts and confirmation statements are up to date with no overdue filings, reflecting good regulatory compliance and governance standards.
• Clear Control Structure: The significant control by one individual, who is also a director, simplifies decision-making and may contribute to operational focus.

4. Due Diligence Notes:

• Investigate the nature and terms of the long-term creditors to assess repayment obligations and impact on future liquidity.
• Review cash flow statements and projections (not provided) to evaluate how operating activities support working capital and debt servicing.
• Confirm the business model and revenue sources given the SIC code for business membership organizations, to understand operational sustainability and market positioning.
• Assess any related party transactions given the controlling shareholder’s dominant role, to rule out governance or financial risks.
• Verify reasons for director change mid-2025 and whether this impacts strategic direction or controls.