M4 TYRES (WILTSHIRE) LTD

Executive Summary

M4 Tyres (Wiltshire) Ltd exhibits a solid balance sheet with growing net assets and maintained liquidity, reflective of operational stability in its early years. While no compliance issues are evident, its short trading history and reliance on related party loans necessitate further investigation into profitability and cash flow dynamics. Overall, the company currently presents a low to medium risk profile for investors, contingent on confirming sustainable cash flows and governance safeguards.

M4 TYRES (WILTSHIRE) LTD - Analysis Report

Company Number: 13559828

Analysis Date: 2025-07-20 14:49 UTC

1. Risk Rating: LOW to MEDIUM
   The company demonstrates positive net assets, consistent growth in shareholder funds, and maintains sufficient net current assets to cover short-term liabilities, indicating a relatively low risk of insolvency. However, the short operating history since incorporation in 2021 and reliance on loans from related parties warrants cautious monitoring.

2. Key Concerns:

• Short Operating History: Incorporated in 2021, the company has a limited financial track record, which may expose investors to typical early-stage business risks.
• Related Party Transactions: Material loans to and from related parties are interest-free and repayable on demand, which could pose liquidity and governance risks if these parties' financial health or intentions change.
• Increase in Creditors and Accruals: Current liabilities nearly doubled from £19.5k in 2023 to £37k in 2024, driven by social security, taxes, and accruals, which could pressure cash flow if not managed carefully.

3. Positive Indicators:

• Growth in Net Assets and Shareholders' Funds: Net assets increased substantially from £31.9k to £56.9k in the latest year, reflecting retained earnings and asset growth, supporting solvency.
• Healthy Net Current Assets Position: Net current assets improved to £31.9k, indicating the company can meet its short-term obligations with its current asset base.
• Increasing Tangible Assets: Fixed assets increased from £5.6k to £33.8k, suggesting investment in the business infrastructure that may support operational stability.
• No Filing or Compliance Issues: Accounts and confirmation statements are filed on time with no overdue filings, indicating good regulatory compliance.

4. Due Diligence Notes:

• Examine Profit & Loss Details: The absence of the profit and loss account in filings limits insight into profitability and cash flow trends; obtaining this information is critical.
• Assess the Nature and Terms of Related Party Loans: Clarify the purpose, repayment plans, and potential risks associated with related party loans to understand liquidity implications.
• Review Cash Flow Statements: To verify if cash generation is sufficient to cover increasing liabilities and investments.
• Evaluate Directors’ Backgrounds: Confirm no adverse director conduct or disqualification records to mitigate governance risks.
• Verify Stock Valuation and Turnover: Stocks increased by ~40%, requiring assessment of turnover rates and inventory management to avoid stock obsolescence risk.