FORNAX TRADING LIMITED

Executive Summary

Fornax Trading Limited shows signs of financial improvement with net assets turning positive in the latest year; however, persistent working capital deficits and a minimal equity base indicate moderate solvency and liquidity risks. The company is compliant with filing requirements but remains small and operationally limited, suggesting careful monitoring of cash flows and liabilities is advisable. Further investigation into cash management and governance is recommended to confirm sustainability.

FORNAX TRADING LIMITED - Analysis Report

Company Number: SC709904

Analysis Date: 2025-07-20 11:33 UTC

1. Risk Rating: MEDIUM
   Fornax Trading Limited demonstrates recent improvement in net assets but continues to show marginal net current liabilities and minimal equity, warranting a cautious view on its financial stability.

2. Key Concerns:

• Working Capital Deficit: Despite growth in current assets, current liabilities remain slightly higher, leading to a negative net current assets position (-£914), which may pressure short-term liquidity.
• Minimal Net Assets and Equity: The net assets stand at only £314, reflecting a very thin equity buffer to absorb potential losses or financial shocks.
• Limited Operational Scale and History: Incorporated in 2021 and classified as a micro-entity with only one employee, the company’s operational scale is small, increasing vulnerability to market fluctuations or operational setbacks.

3. Positive Indicators:

• Improvement in Financial Position: The company moved from net liabilities of -£2,087 in 2023 to a positive net asset position in 2024, indicating better financial management or increased capital injection.
• No Overdue Filings: Both annual accounts and confirmation statements are up to date, reflecting good compliance with regulatory requirements.
• Stable Industry Classification: Operating in retail sale of cosmetic and toilet articles and wholesale trade sectors, which can have consistent demand if managed well.

4. Due Diligence Notes:

• Review the nature and terms of current liabilities to assess short-term repayment pressures and potential refinancing needs.
• Investigate cash flow statements and trading performance to confirm whether operating activities generate positive cash flow sufficient to cover liabilities.
• Examine shareholder structure and any recent capital contributions that may have improved the equity position.
• Assess director background and governance practices given the single director and employee status, to ensure operational oversight and risk management are adequate.