Company Number: 13259578

Analysis Date: 2025-07-20 17:49 UTC

1. Risk Rating: MEDIUM

Justification: The company has shown a significant turnaround in net assets from negative £13,331 in 2023 to a positive £10,670 in 2024, indicating improving solvency. However, the presence of considerable long-term and short-term liabilities, especially loans from directors and other creditors, combined with relatively low cash balances and a small equity base, suggest potential liquidity concerns and reliance on external funding. The company is relatively young (incorporated 2021) and has expanded its employee base from 2 to 4, implying operational growth but also increased overheads.

2. Key Concerns:

• Liquidity Risk: Cash at bank is modest (£28,310) against current liabilities of £100,967, although net current assets are positive due to inventories valued at £190,000, which may not be readily convertible to cash.
• High Level of Debt: Substantial creditor balances include £66,865 loans from directors and £115,003 other creditors repayable after more than one year, indicating dependency on related-party and other financing.
• Negative Historical Net Assets: The company had negative shareholders' funds in prior years, reflecting past losses that might impact creditworthiness and investor confidence.

3. Positive Indicators:

• Improved Financial Position: Turnaround from net liabilities to net assets within one year signifies operational improvement or successful capital injection.
• Compliance: Timely filing of accounts and confirmation statements with no overdue filings suggests good regulatory compliance.
• Business Diversification: Engagement in multiple SIC activities (management consultancy, real estate trading, and retail via internet) could provide diversified revenue streams supporting operational stability.

4. Due Diligence Notes:

• Investigate the nature and terms of director loans and other long-term creditors to assess refinancing risk and potential encumbrances on assets.
• Verify the realizability of inventory valued at £190,000, including its liquidity and turnover rate.
• Review the company's cash flow statements and forecasts to evaluate ongoing liquidity and ability to meet short-term obligations.
• Assess related-party transactions and governance controls given the director’s loans and small shareholder equity.
• Confirm the reasons behind the previous name change and any implications for business continuity or reputation.