H AND C AUTOMOTIVE LTD

Executive Summary

H AND C AUTOMOTIVE LTD has demonstrated notable financial improvement over recent years, moving to a positive net asset and liquidity position. However, the company remains small with limited fixed assets and some reliance on director loans, which introduces moderate solvency and operational risk. Current compliance with filing requirements and improved working capital are positive, but deeper analysis of cash flow sustainability and creditor composition is advised before investment.

H AND C AUTOMOTIVE LTD - Analysis Report

Company Number: 13616244

Analysis Date: 2025-07-29 18:25 UTC

1. Risk Rating: MEDIUM
   While H AND C AUTOMOTIVE LTD shows improvement in net current assets and net assets from prior years, the overall scale is small and the company carries significant current liabilities relative to cash. The presence of director loans and limited tangible assets suggests moderate solvency risk. However, the company is current with filings and shows positive working capital in the latest year, mitigating immediate liquidity concerns.

2. Key Concerns:

• Modest Cash Position vs. Current Liabilities: Cash increased to £22,015 in 2024 but current liabilities also rose to £11,396, including £8,754 in taxes and social security, indicating potential cash flow pressure to meet short-term obligations.
• Director Loans as a Liability: £1,760 owed to directors raises questions on related party transactions and sustainability of funding sources if external financing is limited.
• Small Scale and Limited Fixed Assets: Net assets of £11,170 and tangible fixed assets of £551 highlight a very small asset base, which could constrain operational flexibility and limit collateral for borrowing.

3. Positive Indicators:

• Improved Financial Position: The company moved from negative net current assets in 2021 and 2022 to positive net current assets of £10,619 in 2024, showing strengthened liquidity.
• No Filing Overdue: Accounts and confirmation statements are up to date, demonstrating compliance with regulatory requirements and good governance practices.
• Consistent Business Activity: Operating in vehicle maintenance and repair with a stable single-employee headcount suggests focused and manageable operations.

4. Due Diligence Notes:

• Examine Cash Flow Details: Investigate the sources of cash inflows that enabled the significant increase in cash holdings and whether these are sustainable.
• Analyze Director Loan Terms: Review the nature, repayment terms, and interest conditions of director loans to assess risk and dependency.
• Review Tax and Social Security Liabilities: Clarify reasons for the large taxes and social security creditor balance and verify payment plans or disputes.
• Assess Business Model Viability: Understand revenue streams, customer base, and growth prospects given the small scale and recent name change from removals to automotive.