M SAJJAD OPTICAL LIMITED

Executive Summary

M Sajjad Optical Limited is a newly incorporated micro-entity with significant leverage and liquidity challenges reflected by high long-term debt and negative working capital. While regulatory filings are up to date and governance appears straightforward, the minimal equity and financial structure present a high risk profile. Further scrutiny of creditor terms, cash flow forecasts, and operational progress is recommended to better understand the company's sustainability.

M SAJJAD OPTICAL LIMITED - Analysis Report

Company Number: 14975535

Analysis Date: 2025-07-20 11:34 UTC

1. Risk Rating: HIGH
   The company's financials indicate significant solvency and liquidity concerns, primarily due to a substantial amount of long-term creditors that nearly equal fixed assets and a negative net working capital position. Given it is a newly incorporated micro-entity with minimal operational history, these financial indicators suggest elevated risk.

2. Key Concerns:

• High Long-Term Debt: Creditors due after more than one year stand at £127,422, almost matching the fixed assets of £170,275, suggesting high leverage and potential difficulty in servicing debt.
• Negative Net Current Assets: The company’s current liabilities (£49,410) exceed its current assets (£6,657) resulting in a negative net working capital of -£42,753, implying liquidity stress to meet short-term obligations.
• Minimal Equity Base: Shareholders’ funds total only £100, reflecting very limited capital buffer to absorb losses or finance operations.

3. Positive Indicators:

• No Overdue Filings: Both accounts and confirmation statement are filed on time, demonstrating regulatory compliance and good governance at this early stage.
• Active Status with Single Director Control: The company is active with a sole director and 75-100% controlling shareholder, which may facilitate swift decision-making.
• Micro-Entity Reporting Compliance: Accounts prepared under FRS 105 with exemption from audit, appropriate for size and stage, reducing administrative burden.

4. Due Diligence Notes:

• Nature and Terms of Long-Term Creditors: Investigate the creditor profile, repayment schedules, interest terms, and whether these are related party loans or external financing.
• Cash Flow and Profitability Projections: Examine management’s forecasts and business plans to assess future operational viability and ability to improve liquidity.
• Asset Valuation and Usage: Confirm the nature of fixed assets (likely property or equipment) and whether these are encumbered or could be liquidated if necessary.
• Director and Shareholder Background: Assess the track record and financial capability of Mohammed Sajjad as the sole controlling party.
• Operational Status and Revenue Generation: Given the company’s recent incorporation and limited financial data, verify if trading activities have commenced and revenue streams exist.