HOME DONE LTD

Credit Opinion: DECLINE The company is technically balance sheet insolvent, with net liabilities of £225,639 as of April 2025. This represents a catastrophic deterioration of £362,563 from the prior year's positive net asset position of £136,924. The severe erosion of equity, combined with negative working capital, indicates that the business cannot safely service additional debt obligations. Extending credit to an insolvent entity without guaranteed third-party support poses an unacceptable risk of default.

Financial Strength: Critical The balance sheet has fundamentally broken down. As of 30 April 2025, total assets stand at £285,138, but these are vastly outweighed by combined liabilities. Current liabilities of £270,353 exceed current assets of £222,171, resulting in negative working capital of -£48,182. Furthermore, the company holds £248,261 in long-term creditors. Shareholders' funds are deeply negative at -£225,639, meaning the company has no financial cushion and is entirely reliant on creditor forbearance to continue trading. The dramatic swing from a net asset position to a substantial net liability over a single fiscal year suggests significant trading losses, asset write-downs, or capital extraction.

Cash Flow Assessment: Severe Liquidity Strain Liquidity is critically impaired. Current assets plummeted by 56% from £509,118 in 2024 to £222,171 in 2025, while current liabilities surged by 23% from £219,361 to £270,353. This severe squeeze means the company lacks the liquid resources to meet its imminent financial commitments. With net current liabilities firmly in the red, the business is entirely dependent on the continued patience of its short-term creditors (likely suppliers and/or HMRC) and any potential cash injections from its parent entity or director to avoid administration.

Monitoring Points: - Going Concern Viability: As the company is balance sheet insolvent, monitor for the filing of a "Going Concern" basis note in future accounts or signs of formal insolvency proceedings (Administration, Liquidation). - PSC/Parent Support: Leitmotif Limited owns over 75% of the shares. If credit is considered under any exceptional circumstances, a formal, legally binding letter of comfort or guarantee from Leitmotif Limited will be mandatory. - Creditor Pressure: Watch closely for County Court Judgments (CCJs) or statutory demands, which are highly probable given the negative working capital position. - Asset Realization: Monitor whether the drop in current assets was due to inventory clearance, bad debts, or cash consumption to fund operating losses.