Company Number: NI668978

Analysis Date: 2025-07-29 16:17 UTC

1. Risk Rating: MEDIUM
   The company shows a modest positive net asset position as of the latest accounts date but continues to carry net current liabilities, indicating ongoing liquidity pressure. The business is small and relatively new, with some operational growth but also signs of potential cash flow constraints.

2. Key Concerns:

• Negative Net Current Assets: The company has net current liabilities of £8,862 at 30 April 2024, reflecting that current liabilities exceed current assets. This raises liquidity risk and suggests potential difficulties in meeting short-term obligations without additional financing.
• Significant Increase in Current Liabilities: Current liabilities grew substantially from £18,936 in 2023 to £59,958 in 2024, particularly social security and other taxes rising from £13,772 to £48,404. This could indicate delayed payments or tax accruals that require management attention.
• Concentrated Control and Small Scale: With one individual holding 50-75% ownership and voting rights, governance risks exist related to decision-making concentration. The company employs only two staff and operates in a competitive advertising sector, which may limit operational resilience.

3. Positive Indicators:

• Return to Positive Net Assets: The net asset position improved from a deficit of £6,937 in 2023 to a positive £2,017 in 2024, which suggests some recovery or profitability over the year.
• Asset Growth: Tangible fixed assets increased markedly (from £2,343 to £10,879), possibly reflecting investment in operational capacity or equipment to support business growth.
• Compliance and Filing: The company is up to date with its accounts and confirmation statement filings, indicating good regulatory compliance and reduced risk of penalties or enforcement action.

4. Due Diligence Notes:

• Investigate the nature and timing of the large increase in current liabilities, especially tax-related liabilities, to assess whether these are deferred payments, disputed amounts, or accurately accrued expenses.
• Review cash flow statements and management accounts (not provided) to understand operational cash generation and ability to service short-term debts.
• Assess client concentration and receivables aging within debtors (£48,781) to determine collection risk and revenue quality.
• Clarify the nature of fixed assets additions and depreciation policy to evaluate capital expenditure sustainability and impact on cash flow.
• Understand the impact of director ownership concentration on governance practices and risk management.