IPSWICH VEHICLE REFINISHERS (SUFFOLK) LTD
Executive Summary
Ipswich Vehicle Refinishers (Suffolk) Ltd currently exhibits financial stress indicated by negative net assets and net current liabilities, raising solvency and liquidity concerns. While regulatory compliance appears satisfactory and the business operates within a defined sector, an investor should carefully review cash flow management and the sustainability of operations before proceeding.
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This analysis is opinion only and should not be interpreted as financial advice.
IPSWICH VEHICLE REFINISHERS (SUFFOLK) LTD - Analysis Report
Risk Rating: HIGH
The company shows a negative net asset position and net current liabilities worsening over the last reported year, indicating solvency concerns and potential financial distress risk.Key Concerns:
- Negative net assets of £638 as at 30 Nov 2023, down from positive £4,770 in prior year, signaling erosion of shareholder equity.
- Net current liabilities of £11,888 indicating inability to cover short-term obligations with current assets, raising liquidity risk.
- Small scale operation (micro entity, 2 employees) with limited fixed assets and potential dependence on few directors/shareholders, which may challenge operational stability and scalability.
- Positive Indicators:
- Company status is active with no overdue filings or compliance issues noted, suggesting regulatory compliance is currently maintained.
- Directors have been in place since incorporation with no adverse records disclosed.
- Business operates in a defined niche (vehicle maintenance and repair) which may benefit from steady local demand.
- Due Diligence Notes:
- Investigate recent trading performance, cash flow statements, and any creditor arrangements to understand how liquidity shortfalls are managed.
- Confirm whether the negative equity position is a temporary issue or reflects ongoing losses and capital erosion.
- Review potential contingent liabilities or off-balance sheet exposures that may exacerbate financial risk.
- Assess directors' plans for business turnaround or recapitalization given declining net assets.
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