Company Number: 12918716

Analysis Date: 2025-07-20 11:16 UTC

1. Risk Rating: MEDIUM

Justification: The company is currently active and filing accounts on time, which is positive. However, the micro-entity financials show a declining net asset base and increasing current liabilities exceeding current assets, indicating potential liquidity stress. The small scale of operations and minimal equity base increase vulnerability to cash flow shocks.

2. Key Concerns:

• Liquidity Deficit: Net current liabilities have grown from £789 in 2022 to £14,601 in 2023, implying the company’s short-term obligations exceed its short-term assets significantly.
• Declining Net Assets: Net assets decreased from £3,773 in 2022 to £2,611 in 2023, highlighting erosion of equity which could impair solvency if the trend continues.
• Small Scale and Limited Capital: Share capital is only £100, and the company employs just 2 people, suggesting limited operational scale and possibly constrained financial flexibility.

3. Positive Indicators:

• Compliance: No overdue filings for accounts or confirmation statements, indicating good regulatory compliance.
• Active Operations: Presence of fixed assets acquisition and current assets growth reflect ongoing business activity.
• Established Director: The sole director has held the position since incorporation with no adverse records noted.

4. Due Diligence Notes:

• Review detailed cash flow and profit & loss information to assess operational profitability and cash generation capacity, which is not included in the micro-entity accounts.
• Investigate reasons for the significant increase in current liabilities—whether due to trade creditors, accruals, or other short-term debt.
• Confirm the nature and timing of fixed asset additions to understand capital expenditure plans and their impact on working capital.
• Evaluate any contingent liabilities or off-balance sheet commitments that might affect solvency.