FOREVER RED COMMUNICATIONS LTD

Executive Summary

Forever Red Communications Ltd presents a solid financial position with strong liquidity and growing shareholder equity, supporting a low solvency risk. While current liabilities and trade creditors have increased notably, the company remains compliant with filings and shows operational stability. Further inquiry into creditor and taxation balances is advised to fully understand short-term cash flow dynamics.

FOREVER RED COMMUNICATIONS LTD - Analysis Report

Company Number: 13298311

Analysis Date: 2025-07-29 19:24 UTC

1. Risk Rating: LOW
   Forever Red Communications Ltd demonstrates strong liquidity and solvency indicators with positive net current assets and increasing shareholder funds over the last three years. The company is active, up to date with statutory filings, and operating within its small company exemption framework, which supports a low risk profile.

2. Key Concerns:

• Significant increase in current liabilities from £90k (2023) to £150k (2024), mainly driven by taxation and social security liabilities, which could pressure cash flows if not managed properly.
• Trade creditors rose markedly from £2.9k to £53.1k, indicating potential delays in supplier payments or changes in payment terms that warrant monitoring.
• Limited fixed assets and reliance on current assets (primarily cash and debtors) suggest the business model may be asset-light but dependent on maintaining sales and prompt collections.

3. Positive Indicators:

• Strong liquidity position with cash balances increasing from £242k to £344k and net current assets improving from £240k to £297k year on year.
• Shareholders’ funds increased consistently from £108k in 2021 to nearly £297k in 2024, reflecting retained earnings growth and financial stability.
• No overdue statutory filings and no signs of regulatory non-compliance; the company remains active with a consistent director in place.

4. Due Diligence Notes:

• Investigate the nature and timing of the increased taxation and social security liabilities to assess if these represent accruals or potential cash flow challenges.
• Review trade creditor aging and supplier agreements to understand the cause of the sharp increase and its impact on supplier relationships.
• Consider examining debtor quality and credit terms as debtors represent a significant portion of current assets.
• Confirm ongoing operational sustainability given the modest fixed asset base and whether the business depends on any key contracts or customers.