Company Number: 14370121

Analysis Date: 2025-07-29 19:33 UTC

1. Risk Rating: MEDIUM

Marks Sparks Limited exhibits some early-stage financial challenges typical for a recently incorporated small business. The company’s net current liabilities persist, albeit improving, and net assets remain minimal, indicating limited financial buffer. However, timely filing and absence of overdue obligations reflect compliance discipline.

2. Key Concerns:

• Persistent Negative Working Capital: The company reported net current liabilities of £-62 as of 2024, improving from £-7,301 in 2023, yet still negative. This suggests potential short-term liquidity strains in meeting immediate obligations.
• Low Net Asset Base: Shareholders’ funds are minimal at £238 in 2024, down from £299 in 2023, indicating a very thin equity cushion to absorb operational losses or external shocks.
• Director Advances and Related Party Transactions: Significant advances from the director totaling about £1,550 as a creditor balance raise concerns about reliance on director funding rather than operational cash flow, which may impact sustainability if not regularized.

3. Positive Indicators:

• Compliance and Reporting: The company is up to date with statutory filings and accounts, with no overdue returns or accounts, demonstrating good regulatory compliance.
• Business Activity Growth: Trade debtors increased significantly from £4,205 in 2023 to £16,836 in 2024, suggesting increasing sales or contracted work in the electrical installation sector (SIC 43210).
• Minimal Staff Costs: The company employs only one person (the director), which keeps fixed overheads low, appropriate for early-stage operations.

4. Due Diligence Notes:

• Review Cash Flow Statements and Projections: To assess if the company can convert increasing debtors to cash effectively and manage working capital to avoid liquidity crises.
• Examine Terms and Recoverability of Trade Debtors: Large increase in debtors needs verification to ensure these are collectible and not overstated or impaired.
• Investigate Director Advances: Clarify the nature, terms, and future plans for repayment or conversion of director loans to equity to understand financial support and risk exposure.