Company Number: 14155378

Analysis Date: 2025-07-29 15:52 UTC

1. Risk Rating: HIGH
   The company exhibits a high risk profile primarily due to persistent negative net current assets, significant current liabilities exceeding current assets, and a history of negative shareholder funds until the latest financial year. Although there has been some improvement recently, liquidity concerns remain significant.

2. Key Concerns:

• Liquidity Shortfall: As of June 2024, current liabilities (£728,517) substantially exceed current assets (£442,374), resulting in negative net current assets of £286,143. This indicates potential short-term cash flow stress.
• Working Capital Deficit History: The company reported negative net current assets for three consecutive years (2022 to 2024), though improving from -£840k to -£286k, pointing to ongoing working capital challenges.
• Reliance on Shareholders' Funds Recovery: The improvement from negative shareholder funds (£-192,600 in 2023) to positive (£211,959 in 2024) suggests recent capital injections or retained earnings; however, the source and sustainability of this turnaround require verification.

3. Positive Indicators:

• Increased Cash Reserves: Cash at bank increased significantly from £66,187 in 2023 to £372,569 in 2024, which may provide some buffer for operational needs.
• Growth in Tangible Fixed Assets: Net book value of tangible assets remains strong at £498,102, indicating investment in operational capacity.
• No Filing or Compliance Issues: The company’s accounts and confirmation statements are up to date with no overdue filings, suggesting regulatory compliance is maintained.

4. Due Diligence Notes:

• Investigate the nature of liabilities classified as "other creditors" (£622,015) to assess payment terms, risk of default, and any contingent liabilities.
• Review the source of improved shareholder funds and cash balances in the latest year to confirm if these are from operating profits, capital injections, or related party financing.
• Assess the company’s cash flow projections and operational break-even point to determine sustainability given persistent working capital deficits.
• Examine management plans for reducing current liabilities and improving liquidity, including any restructuring or financing arrangements.
• Verify the impact of the increase in employees (from 13 to 31) on operational costs and cash flow.