Company Number: 13887199

Analysis Date: 2025-07-20 16:48 UTC

1. Risk Rating: HIGH
   The company exhibits high solvency and liquidity risk based on financial data, notably a substantial negative net current asset position and a large director’s loan account classified as a current liability. The minimal equity base relative to liabilities raises concerns about the company's ability to meet short-term obligations.

2. Key Concerns:

• Negative Working Capital: Net current liabilities of £76,850 indicate the company’s current liabilities significantly exceed current assets, potentially straining operational cash flow.
• Director’s Loan Account Exposure: £124,138 of current liabilities are owed to the director, representing a concentration risk and dependence on director financing to meet liabilities. This may not be sustainable long term.
• Dividend Payment Despite Financial Stress: A £15,000 dividend was paid in the latest year despite negative working capital and limited cash resources, which could impair liquidity and creditor confidence.

3. Positive Indicators:

• Consistent Equity Growth: Net assets increased from £11,814 to £17,805, reflecting some retained earnings growth.
• Stable Fixed Asset Base: Fixed assets remain consistent, indicating no major write-downs or disposals.
• Timely Filing and Compliance: Accounts and confirmation statements are up to date with no overdue filings or regulatory compliance issues noted.

4. Due Diligence Notes:

• Investigate the nature and terms of the director’s loan account, including repayment plans and any potential calls on these funds.
• Review cash flow statements and future projections to assess operational liquidity and the ability to reduce current liabilities.
• Confirm the rationale and legality of dividend payments given the company’s financial position and compliance with Companies Act provisions on distributions.
• Assess the quality and turnover of stock to verify that inventory levels are appropriate and not overstated.
• Evaluate management plans to improve working capital and reduce reliance on director financing.