Company Number: 13880898

Analysis Date: 2025-07-20 12:42 UTC

1. Risk Rating: LOW
   The company demonstrates a stable financial position with positive net current assets and shareholders’ funds exceeding current liabilities. It maintains adequate cash balances and is compliant with filing requirements, indicating low immediate risk.

2. Key Concerns:

• Increase in Current Liabilities: Current liabilities more than doubled from £16.6k in 2023 to £37.2k in 2024, driven by higher tax, VAT, and directors’ current account balances. This warrants monitoring for potential cash flow pressures.
• Concentrated Control and Management: The sole director and 100% owner is also the only employee, creating operational dependency risk and governance concentration.
• Limited Business Scale and History: Incorporated in 2022, the company is relatively young and small, which may limit operational resilience and financial flexibility during adverse conditions.

3. Positive Indicators:

• Positive Working Capital: Net current assets remain positive at £28.8k in 2024, indicating the company can meet short-term obligations.
• Cash Position: Cash and cash equivalents remain strong (£45.8k), showing healthy liquidity.
• Compliance: No overdue accounts or confirmation statements filed, demonstrating sound regulatory compliance and governance discipline.
• Profit Retention: Shareholders’ funds remain stable (£35.5k), suggesting profitability or prudent financial management.

4. Due Diligence Notes:

• Investigate the reason for the increase in current liabilities, particularly the rise in directors’ current account and tax/VAT liabilities, to assess any potential cash flow timing issues.
• Review business contracts and client base to evaluate sustainability of revenue streams given the company’s small size and industry (IT consultancy).
• Confirm director’s experience and capacity to manage operational risks given single-person control and employment.
• Assess any contingent liabilities or off-balance sheet risks not visible in the filed accounts.
• Verify whether the company has adequate insurance and compliance with industry-specific regulations.