Company Number: 14253262

Analysis Date: 2025-07-20 14:09 UTC

1. Risk Rating: HIGH
   The company’s solvency and liquidity position has deteriorated significantly over the last financial year, with net current assets dropping from £131,176 to just £79. This sharp decline poses a material risk to the company’s ability to meet its short-term obligations.

2. Key Concerns:

• Severe Liquidity Depletion: Current liabilities have doubled from £84,227 to £171,338 while current assets decreased from £215,403 to £171,417, resulting in negligible net working capital. This indicates potential cash flow stress or over-reliance on short-term creditor financing.
• Erosion of Equity: Shareholders’ funds have declined dramatically from £131,176 to £79, suggesting significant losses or capital withdrawals. This weakens the company’s financial buffer against operational risks.
• Unsecured Director Loans: The directors’ loan account is modest but remains unsecured, repayable on demand, and interest-free, which may indicate informal financing arrangements rather than stable capital structure.

3. Positive Indicators:

• Compliance and Timely Filing: The company is current on its accounts and confirmation statement filings with no overdue returns, reflecting good regulatory compliance.
• Stable Employment: The average number of employees remained stable at 3, indicating operational continuity.
• Exemption from Audit: As a micro-entity, the company benefits from simplified reporting requirements, reducing administrative burden.

4. Due Diligence Notes:

• Investigate the reasons behind the drastic reduction in net current assets and shareholders’ funds, including detailed profit and loss data to assess operational performance and any extraordinary items.
• Review cash flow statements (if available) to understand cash generation and usage patterns over the last year.
• Confirm the nature of creditor balances contributing to the high current liabilities and assess any potential supplier or creditor disputes or payment delays.
• Clarify the company’s business model and client base to evaluate sustainability of revenue streams in the context of the financial decline.
• Assess the directors’ intentions and plans to restore financial stability, including any capital injections or restructuring measures planned or underway.