Company Number: 13055893

Analysis Date: 2025-07-20 11:34 UTC

1. Risk Rating: HIGH
   The company exhibits significant liquidity concerns and reliance on director loans to finance operations, indicating elevated solvency risk.

2. Key Concerns:

• Negative Net Current Assets in 2023: The company has net current liabilities of £3,264 as of 31 December 2023, meaning short-term liabilities exceed short-term assets, which can impair its ability to meet immediate obligations.
• Substantial Increase in Directors’ Loan Accounts: Creditors due within one year include £28,423 owed to directors in 2023, up from £6,513 in 2022, showing growing dependence on internal financing rather than operational cash flow.
• Low Cash Balance: Cash at bank is almost negligible (£1 in 2023), signifying limited liquidity for day-to-day operations or unexpected expenses.

3. Positive Indicators:

• Increasing Net Assets: Despite liquidity issues, net assets improved from £1,175 in 2022 to £2,438 in 2023, reflecting some growth in equity possibly from retained earnings.
• No Overdue Filings: Company accounts and confirmation statements are filed on time, indicating compliance with regulatory requirements.
• Stable Leadership: Directors have been consistent since incorporation with no adverse records noted, suggesting stable governance.

4. Due Diligence Notes:

• Investigate the nature and terms of the directors’ loan accounts, including repayment plans and interest arrangements, to assess long-term solvency and related-party risk.
• Review cash flow statements and operational revenue trends to understand the root causes of low liquidity and assess operational sustainability.
• Confirm stock valuation and work-in-progress recognition policies, given the significant £25,000 stock figure appearing in 2023 with no prior year comparison, to evaluate potential overstatement risks.
• Assess the company's client base and contract pipeline to determine future revenue visibility and operational stability.