Company Number: SC685239

Analysis Date: 2025-07-29 19:37 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns as evidenced by persistent negative net current assets and shareholders' funds, indicating an inability to meet short-term liabilities and an erosion of equity.

2. Key Concerns:

• Negative Net Current Assets: The company’s current liabilities (£10,947) substantially exceed current assets (£817) as of 31 January 2024, resulting in a negative working capital position of £-10,130, which raises immediate liquidity concerns.
• Negative Shareholders' Funds: Shareholders' funds are negative at £-6,461, worsening from the prior year, signaling accumulated losses or deficits that undermine the company’s financial stability.
• Director’s Advances: There is a director loan balance of £2,862 outstanding, which may indicate reliance on director funding to sustain operations, potentially masking operational cash flow deficiencies.

3. Positive Indicators:

• Current Filing and Compliance Status: The company is active and has met recent filing deadlines for both accounts and confirmation statements, demonstrating regulatory compliance.
• Low Overhead Structure: The company operates as a micro entity with only two employees, which may help contain fixed costs.
• Environmental Consulting Sector: The SIC code (74901) suggests the company operates in environmental consulting, a sector with potential growth opportunities aligned with increasing regulatory and corporate sustainability demands.

4. Due Diligence Notes:

• Cash Flow and Profitability Analysis: Investigate detailed profit and loss accounts and cash flow statements to assess operational income sufficiency and trend of losses or gains.
• Director Loan Terms and Repayment Plans: Clarify the nature of director advances, any formal agreements, and plans for repayment to assess risks related to related-party transactions.
• Business Model Sustainability: Evaluate client base, contract pipeline, and revenue diversification to understand ability to improve liquidity and solvency.
• Potential Contingent Liabilities: Review whether any off-balance-sheet liabilities or pending obligations exist which could further stress financial position.