HEVVI CREATIVE STUDIOS LTD

Executive Summary

Hevvi Creative Studios Ltd demonstrates a high risk profile primarily driven by persistent liquidity shortfalls and a marked decline in equity, raising doubts about its ability to meet financial obligations in the near term. While the company maintains regulatory compliance and holds tangible assets, the reliance on director loans and negative working capital warrant close scrutiny. Further due diligence is recommended to evaluate operational viability and financing arrangements.

HEVVI CREATIVE STUDIOS LTD - Analysis Report

Company Number: 13134364

Analysis Date: 2025-07-20 13:59 UTC

1. Risk Rating: HIGH
   The company exhibits significant liquidity and solvency challenges as evidenced by persistent negative net current assets and a steep decline in shareholders' funds over the latest two years. The current liabilities exceed current assets by a substantial margin, indicating an inability to meet short-term obligations without additional funding.

2. Key Concerns:

• Negative Net Current Assets: The latest year shows net current liabilities of £4,481 against current assets of only £3,729, signaling liquidity stress.
• Declining Shareholders' Funds: Equity has decreased sharply from £2,267 in 2024 to £318 in 2025, implying accumulated losses or capital erosion.
• Director Loans as Creditors: Substantial loans from directors (£6,168 in 2025) form a large portion of current liabilities, suggesting reliance on related-party financing which may not be sustainable.

3. Positive Indicators:

• Fixed Asset Base: The company holds tangible fixed assets valued at £4,799, providing some asset backing.
• No Overdue Filings: Annual accounts and confirmation statements are filed on time, reflecting regulatory compliance.
• Active Status with Recent Director Appointment: The company is active with an additional director appointed recently, potentially indicating ongoing management efforts.

4. Due Diligence Notes:

• Investigate the nature and terms of director loans and whether they are repayable on demand or convertible to equity.
• Review detailed profit and loss data (not provided) to understand the causes of equity erosion and whether losses are operational or due to one-off items.
• Assess cash flow forecasts and working capital management plans to determine if liquidity issues are expected to persist.
• Confirm whether the company has access to external financing or support from stakeholders to sustain operations.
• Verify the impact of no employees and the business model sustainability in the advertising agency sector, including client base and revenue streams.