Company Number: 14470119

Analysis Date: 2025-07-29 14:16 UTC

1. Risk Rating: MEDIUM
   Justification: Lee Cooling Ltd is a newly incorporated private limited company (since late 2022) operating in steam and air conditioning supply. The balance sheet shows modest positive net current assets and net assets, with shareholders’ funds slightly declining from £29,567 in 2023 to £26,548 in 2024. The company holds tangible fixed assets and maintains cash reserves; however, current liabilities rose substantially in 2024, which could pressure liquidity. Lack of income statement data limits visibility on profitability and operational cash flows, warranting a medium risk rating due to limited operating history and some financial volatility.

2. Key Concerns:

• Rising Current Liabilities: Current liabilities increased by approximately 50% from £20,735 to £31,229 within one year, mainly driven by a significant rise in other creditors (£996 to £11,667). This may indicate delayed payments or increasing short-term obligations that could strain liquidity.
• Declining Net Assets: Net assets decreased by about 10% over the year, suggesting either operating losses or increased provisions (which doubled from £1,557 to £2,650), potentially signaling emerging liabilities or risks.
• Limited Financial Disclosure: The company filed under the small companies regime with exemption from audit and did not submit an income statement, restricting insight into profitability, revenue trends, and cash flow dynamics, which increases uncertainty regarding operational stability.

3. Positive Indicators:

• Positive Net Current Assets: Despite increased liabilities, net current assets remain positive (£15,949), providing a buffer to cover short-term obligations.
• Cash Holdings: The company retains a reasonable level of cash (£23,433) relative to its current liabilities, supporting short-term liquidity.
• No Overdue Filings: The company is current on both accounts and confirmation statement filings, indicating compliance with regulatory obligations.
• Experienced Management: The director and significant controllers are established individuals with apparent local ties, potentially indicating stable governance.

4. Due Diligence Notes:

• Obtain full income statements and cash flow statements to assess profitability, operating cash flow, and working capital management.
• Investigate the nature and cause of the sharp increase in current liabilities, particularly "other creditors," to understand payment terms and creditor relationships.
• Review provisions for liabilities to determine if there are contingent risks, disputes, or warranty claims affecting financial stability.
• Validate the absence of director disqualifications or regulatory sanctions beyond what is publicly available.
• Confirm the company’s business model, customer base, and contract stability given its short operating history.