Company Number: 13256987

Analysis Date: 2025-07-20 12:52 UTC

1. Risk Rating: MEDIUM
   FOME HOLDINGS LIMITED shows positive net current assets but very tight working capital and very low cash balances relative to current liabilities, indicating a moderate risk of liquidity stress. The company is small, with limited equity and a single director/shareholder controlling all voting rights, which concentrates control but may raise governance concerns.

2. Key Concerns:

• Liquidity Constraints: Cash at bank is minimal (£2,007) compared to current liabilities (£168,608), suggesting potential cash flow difficulties despite net current assets being slightly positive (£1,129). The high level of debt owed to related parties and bank borrowings further stresses liquidity.
• Dependence on Related Parties: Substantial creditor balances are owed to related parties (£74,608) and other companies, which may indicate reliance on intra-group financing rather than external creditors. This can be a risk if related parties alter terms.
• Limited Capital Base: Share capital is nominal (£100-200), and shareholders’ funds are very small (£1,129), which constrains the company’s ability to absorb losses or invest for growth.

3. Positive Indicators:

• Improving Net Assets: Net assets have increased from a negative position in 2021 (£-100) to a positive position (£1,129) in 2024, reflecting some incremental financial improvement.
• No Overdue Filings: The company is current with its statutory accounts and confirmation statement filings, indicating compliance with regulatory requirements.
• Single Owner Control: Ownership and management are unified under one director, which can facilitate quick decision-making and strong oversight, provided governance standards are met.

4. Due Diligence Notes:

• Review detailed cash flow statements and bank statements to assess real liquidity and timing of cash inflows and outflows.
• Examine terms and conditions of related party loans and creditors to understand potential risks or contingencies associated with these balances.
• Investigate the nature of debt classified as bank borrowings (£38,000) to assess repayment schedules and covenants.
• Confirm the accuracy and completeness of debtor balances (£167,730), testing for any overdue or uncollectible amounts that may impair liquidity.
• Assess director’s loan account and any guarantees or advances provided by the director for potential financial risks.