HEX FIREWORKS LIMITED

Executive Summary

HEX Fireworks Limited shows significant financial distress with minimal net assets and working capital, raising high solvency and liquidity risks. However, the company is compliant with filing requirements and maintains operational continuity through a stable workforce and active online sales presence. Further financial detail and management insight are needed to fully assess ongoing viability and risk mitigation plans.

HEX FIREWORKS LIMITED - Analysis Report

Company Number: 12714047

Analysis Date: 2025-07-29 16:28 UTC

1. Risk Rating: HIGH
   The company’s financials reveal extremely thin net assets (£117 in 2024) and very narrow net current assets (£617), indicating minimal buffer to meet short-term liabilities. The significant deterioration in net assets from £14,116 in 2021 to £117 in 2024 raises solvency concerns. The micro-entity status limits financial disclosure, restricting detailed assessment.

2. Key Concerns:

• Solvency Pressure: Net assets have declined sharply over recent years, nearing zero, signaling potential inability to absorb losses or meet obligations if conditions worsen.
• Liquidity Constraints: Net current assets are minimal (£617), indicating limited working capital, which may constrain day-to-day operations and cash flow flexibility.
• Profitability and Sustainability: Lack of detailed P&L data and continued erosion of equity suggest ongoing operational challenges or losses that threaten long-term viability.

3. Positive Indicators:

• Compliance: The company is current with statutory filings and accounts, with no overdue returns or accounts, indicating good governance and regulatory compliance.
• Stable Workforce: The average number of employees remains steady at 3, supporting operational continuity.
• Active Online Presence: Maintains an active website and sales platform, which supports ongoing commercial activity and market access.

4. Due Diligence Notes:

• Obtain detailed profit and loss statements or management accounts to assess profitability trends and cash flow dynamics.
• Review creditor aging and payment terms to evaluate liquidity risk and supplier relationships.
• Investigate provisions for liabilities noted at £500 in 2024 to understand contingent or potential obligations.
• Assess directors’ plans or capital injection intentions to address declining equity and support business sustainability.
• Verify the nature of the business model and competitive positioning given the SIC codes related to online retail sales.