Company Number: 12534834

Analysis Date: 2025-07-29 12:20 UTC

1. Risk Rating: MEDIUM
   The company's financial position shows signs of concern primarily due to persistent negative net current assets and significant tax liabilities. However, it remains active, compliant with filing deadlines, and has a controlling director with apparent ongoing engagement, which mitigates immediate high risk.

2. Key Concerns:

• Liquidity Constraints: The company reported net current liabilities of £1,467 in 2024 and £2,330 in prior years, indicating short-term obligations exceed liquid assets. Cash reserves are modest at £17,080.
• Significant Tax Liability: Corporation tax creditors have increased substantially to £49,709, which represents a material payable that could pressure cash flows if not managed carefully.
• Director Loan Exposure: The director owes the company £35,563 interest-free with no formal repayment terms, potentially complicating recovery and reflecting reliance on informal financing.

3. Positive Indicators:

• Timely Compliance: Accounts and confirmation statements are filed up to date, demonstrating good regulatory discipline.
• Growing Debtors and Revenue Base: Trade and other debtors increased significantly from £24,128 to £56,423, suggesting expanding business activity or customer base.
• Low Fixed Asset Depreciation: Tangible assets are modest (£2,000 net) and depreciated systematically, indicating no overstatement of assets.

4. Due Diligence Notes:

• Examine the nature and collectability of the large debtor balance (£56,423) to assess quality of receivables and risk of bad debts.
• Investigate the cause and expected settlement plan for the large corporation tax creditor to understand potential cash flow impact.
• Review the terms and implications of the director's loan, including any risks associated with repayment or potential conflicts of interest.
• Assess profitability trends (not disclosed) through management accounts or other data since no profit and loss statement was filed.
• Confirm if provisions relate to deferred tax or other contingent liabilities that may affect future financial stability.