Company Number: SC742254

Analysis Date: 2025-07-20 16:46 UTC

1. Risk Rating: HIGH
   The company exhibits a negative net asset position and net current liabilities as of the latest financial year, indicating solvency concerns. The substantial increase in creditors and director loans further elevates risk.

2. Key Concerns:

• Negative Net Assets and Working Capital Deficit: Net assets declined from £22,708 (2023) to -£7,629 (2024) with net current liabilities of approximately £24,765, suggesting the company’s liabilities exceed its assets and short-term obligations may be difficult to meet.
• Significant Increase in Creditors and Director Advances: Current liabilities nearly doubled to £141,241, and director loan balances rose from negligible to £38,543, indicating reliance on internal financing which may not be sustainable.
• Declining Cash Reserves: Cash decreased markedly from £88,297 to £32,090, raising liquidity concerns and potential cash flow stress.

3. Positive Indicators:

• Growing Tangible Fixed Assets: Investment in fixtures and fittings increased significantly, possibly reflecting business growth or reinvestment in operational capacity.
• No Overdue Filings: Company accounts and confirmation statements are filed on time, indicating compliance with statutory requirements.
• Active Management and Control: Two directors with clear control and involvement suggest active governance and oversight.

4. Due Diligence Notes:

• Investigate the nature and terms of the £21,648 long-term loan and its impact on going concern assumptions.
• Review the cause of the sharp increase in trade and other creditors to assess payment terms and supplier relationships.
• Analyze the company’s revenue and profitability trends (not disclosed here) to understand operational sustainability and cash flow generation.
• Clarify the purpose and terms of director advances to assess potential risks of related party financing.
• Confirm any contingent liabilities or off-balance sheet obligations not reflected in the accounts.