FOUNDATIONS TO FINISHED LTD

Executive Summary

Foundations To Finished Ltd is an early-stage construction business showing promising revenue growth and profitability. However, longstanding negative net assets and a lack of cash reserves signify high solvency and liquidity risks. Investors should carefully evaluate the company’s reliance on related party financing and scrutinize management’s going concern assumptions before committing capital.

FOUNDATIONS TO FINISHED LTD - Analysis Report

Company Number: 14110997

Analysis Date: 2025-07-29 17:30 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency concerns with negative net assets and shareholders' funds persisting over the reporting periods. Despite reported profits, the balance sheet reflects a consistent deficit, indicating financial strain. The absence of cash or cash equivalents further raises liquidity concerns.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Deficit: The company’s net liabilities increased from approximately £20k in 2023 to nearly £15k in 2024, reflecting ongoing financial weakness.
• Liquidity Risk: The absence of any reported cash or cash equivalents as of 31 May 2024, combined with current liabilities exceeding current assets, signals potential cash flow issues to meet short-term obligations.
• Reliance on Related Party Creditors and Borrowings: A material portion (£39k) of current liabilities is due to related parties, and non-current borrowings remain significant (£7.7k), suggesting dependency on insider financing which may not be sustainable.

3. Positive Indicators:

• Improved Operating Performance: Turnover increased substantially from £6,000 to over £71,000 within one year with a reported operating profit of £22,375, showing business growth and operational improvement.
• No Overdue Filings: The company is compliant with statutory filing deadlines for accounts and confirmation statements, indicating good governance in regulatory compliance.
• No Going Concern Warning: The director’s report states no going concern issues, suggesting management’s confidence in continuing operations.

4. Due Diligence Notes:

• Investigate the nature and terms of related party transactions and borrowings to assess repayment risk and potential contingent liabilities.
• Clarify the company’s cash management and working capital strategies given the absence of reported cash balances and ongoing negative net assets.
• Review management’s assumptions in the going concern statement, particularly given the financial deficits and reliance on insider funding.
• Verify the completeness and accuracy of the financial information given the unaudited nature of accounts and limited disclosures on risks or uncertainties.