Company Number: 13677560

Analysis Date: 2025-07-20 13:50 UTC

1. Risk Rating: MEDIUM
   The company's financial position shows positive net assets and net current assets, indicating solvency. However, a significant increase in current liabilities in the latest year, driven partly by an advance from the director, raises concerns about liquidity and reliance on director funding. The company is a micro-entity with limited scale, which can increase operational risk.

2. Key Concerns:

• Sharp increase in current liabilities from £9,906 (2023) to £22,372 (2024) which reduces working capital and may pressure short-term liquidity.
• Director loan of £7,906 is material relative to overall liabilities, suggesting dependence on insider funding rather than external financing or operational cash flow.
• Declining net assets from £24,693 (2021) to £11,453 (2024) indicating erosion of equity capital over a short period; suggests either losses or distributions exceeding profits.

3. Positive Indicators:

• Positive net current assets (£9,468) and net assets (£11,453) as of the latest year end indicate the company remains solvent on a balance sheet basis.
• No overdue filings or compliance issues reported; accounts and confirmation statements are up to date, reflecting good regulatory compliance.
• Operating in a specialized niche (motion picture post-production) which may have growth potential if managed prudently.

4. Due Diligence Notes:

• Investigate the nature and terms of the director loan and its impact on liquidity and solvency, including repayment plans.
• Review profit & loss data and cash flow statements (not provided) to assess operational profitability and cash generation capacity.
• Confirm the reasons for declining net assets and whether these are due to losses, distributions, or other factors.
• Consider market conditions in the motion picture post-production sector and the company’s competitive position and client base.
• Verify the accuracy of reported current assets and liabilities, particularly any related party balances.