Company Number: 14437825

Analysis Date: 2025-07-29 17:38 UTC

1. Risk Rating: HIGH
   Hera Driving School Ltd exhibits significant financial distress as evidenced by its sharply negative net current assets and shareholders' funds in the latest financial year, indicating potential solvency issues.

2. Key Concerns:

• Severe Negative Net Assets: The company’s net assets deteriorated from a positive £2,049 in 2023 to a negative £11,884 in 2024, signaling accumulated losses and erosion of equity.
• Negative Working Capital: Current liabilities (£11,158) far exceed current assets (£201), resulting in a net current liability of £10,957, which suggests potential liquidity constraints to meet short-term obligations.
• Director Loans and Related Party Debt: A substantial portion (£10,939) of current liabilities are loans from directors, which may indicate reliance on director funding to maintain operations, raising concerns about financial sustainability without external support.

3. Positive Indicators:

• Compliance with Filing Requirements: The company is up to date with both accounts and confirmation statement filings, with no overdue documents, reflecting regulatory compliance.
• Active Status and Limited Employee Base: The company remains active with a small workforce (average 1 employee in the latest year), which may help in controlling operating costs.
• Clear Ownership and Control: One individual holds 75-100% of shares and voting rights, simplifying governance and decision-making.

4. Due Diligence Notes:

• Verify the nature and terms of director loans, including repayment schedules and whether these loans are convertible or secured.
• Investigate causes of the rapid financial deterioration between 2023 and 2024, including revenue trends, expense spikes, or one-off charges.
• Review cash flow statements and bank statements to assess liquidity and operational cash generation beyond the balance sheet snapshot.
• Confirm absence of any director disqualifications or regulatory sanctions related to the sole director.
• Assess business model viability and market conditions for driving school activities given the financial losses.