Company Number: 12851389

Analysis Date: 2025-07-29 19:53 UTC

1. Risk Rating: HIGH
   The company shows significant and persistent negative net assets and shareholder funds, indicating insolvency risk. The large long-term liabilities combined with very low cash balances relative to current liabilities raises concern about liquidity and ongoing operational viability.

2. Key Concerns:

• Negative Net Assets: The company has net liabilities of £152,425 as of the latest year-end, worsening from prior years, indicating an erosion of equity and potential insolvency issues.
• Long-Term Debt Load: Bank loans of £165,000 exceed total assets less current liabilities (£12,575), demonstrating a heavy debt burden that may strain cash flows and solvency.
• Low Cash Reserves: Cash of only £1,488 against current liabilities of £165,000 and total creditors signals liquidity stress and limited ability to meet near-term obligations.

3. Positive Indicators:

• Stable Current Assets: Current assets remain roughly stable around £16,000, driven primarily by debtors and VAT/deferred tax assets.
• No Overdue Filings: The company is up to date with accounts and confirmation statement filings, suggesting regulatory compliance is being maintained.
• Ownership Control: A single director and 75-100% shareholder control may allow for decisive management actions if needed.

4. Due Diligence Notes:

• Investigate terms and covenants of the bank loan to assess repayment schedules and any potential default risks.
• Review cash flow forecasts and debtor collections to evaluate the company’s ability to improve liquidity.
• Examine the nature of deferred tax assets and their realizability.
• Assess the company’s business model sustainability given losses and negative equity trends.
• Confirm no contingent liabilities or related party transactions that may exacerbate financial stress.