Company Number: 13963145

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

1. Risk Rating: MEDIUM
   Luna Lux Design Ltd shows moderate financial stability with net assets increasing from £2,215 to £2,587 in the latest year. However, the company is very small, with minimal fixed assets and a large proportion of current assets tied up in a director's loan account. The liquidity position appears adequate but fragile due to low cash balances and reliance on director funding.

2. Key Concerns:

• Liquidity Risk: Cash on hand is minimal (£33), with most current assets (£1,961) consisting of an unsecured, interest-free director's loan, which may not be readily available for operational needs.
• Concentration of Control and Funding: The sole director and 100% owner is also the major creditor to the company, which raises concerns about dependency on a single individual for both governance and liquidity.
• Limited Operational Scale: The company employs only one person (the director), has very small tangible assets (£1,280), and falls under a retail SIC code indicating a niche or startup operation, which may constrain growth and resilience.

3. Positive Indicators:

• Solvency Position: The company maintains positive net current assets (£1,307) and net assets (£2,587), showing it is solvent on a balance sheet basis.
• Compliance: No overdue filings or accounts; company status is active and in good standing with Companies House.
• Consistent Growth: Net assets and net current assets have increased year-on-year, reflecting some operational progress or capital support.

4. Due Diligence Notes:

• Investigate the nature and terms of the director’s loan and assess the likelihood and timing of repayment or conversion into equity.
• Review cash flow forecasts and working capital management to ensure short-term liquidity sufficiency beyond director funding.
• Confirm ongoing operational activities and revenue generation given the company’s small scale and sole employee status.
• Check for any contingent liabilities or off-balance sheet commitments not disclosed in the accounts.
• Assess the competitive environment and market positioning under SIC codes 47990 and 47890 to evaluate business sustainability.