FOLSUM SOLUTIONS LTD

Executive Summary

Folsum Solutions Ltd exhibits high financial risk driven by significant negative working capital and shareholder deficit, indicating challenges in meeting short-term liabilities. While regulatory compliance is maintained and a stable asset base exists, the company’s operational sustainability and governance structure warrant closer examination. Investors should conduct focused due diligence on asset liquidity, cash flow management, and control arrangements before engagement.

FOLSUM SOLUTIONS LTD - Analysis Report

Company Number: 12718458

Analysis Date: 2025-07-20 19:14 UTC

1. Risk Rating: HIGH
   The company shows significant solvency and liquidity concerns evidenced by persistent negative net current assets exceeding £600k and negative shareholders' funds. This indicates inability to cover short-term liabilities and an overall deficit in equity, posing a high risk to creditors and investors.

2. Key Concerns:

• Negative Working Capital: Current liabilities exceed current assets by a large margin (£618,881 net current liabilities in 2023), indicating potential cash flow difficulties to meet short-term obligations.
• Negative Shareholders' Funds: Shareholders’ funds remain negative (£-3,684 in 2023), though slightly improved from previous years, underscoring ongoing accumulated losses or capital erosion.
• Concentration of Control: Two individuals hold 75-100% share ownership and voting rights, which may raise governance and minority investor concerns due to limited oversight or checks and balances.

3. Positive Indicators:

• No Overdue Filings: Accounts and confirmation statements are filed on time, demonstrating regulatory compliance and good administrative practices.
• Stable Fixed Assets: Fixed assets have been maintained around £610k-£615k over recent years, suggesting some underlying asset base that could potentially support operations or be leveraged.
• Active Status with Continuing Operations: The company remains active since incorporation in 2020 with ongoing director engagement and no insolvency proceedings.

4. Due Diligence Notes:

• Investigate the nature and liquidity of fixed assets to assess realizable value and potential for asset-based financing or sale.
• Review detailed cash flow statements and creditor aging schedules to understand working capital management and payment practices.
• Examine the business model and revenue streams given the SIC codes spanning IT services, freight transport, and civil engineering to evaluate operational sustainability and diversification.
• Assess director and shareholder arrangements for potential risks related to related party transactions or governance issues.
• Confirm no contingent liabilities or pending legal issues that could exacerbate financial strain.