Company Number: 14859697

Analysis Date: 2025-07-29 20:21 UTC

1. Risk Rating: HIGH

Justification: The company is newly incorporated (May 2023) with only one financial year filed. The financial statements reveal negative net assets (£1,312 deficit), negative net current assets (£37,989 deficit), and a negative cash position (-£74,657), indicating solvency and liquidity pressures at the reporting date. The small share capital (£100) provides limited equity buffer against operating losses. These factors collectively suggest a high risk of financial distress or inability to meet short-term obligations without additional funding.

2. Key Concerns:

• Negative Net Assets and Working Capital: The company shows a deficit in net assets and net current assets, which is a red flag for solvency and liquidity. Negative working capital implies current liabilities exceed current assets, which may impair the company’s ability to meet short-term debts.
• Negative Cash Position: The reported cash figure is negative (£74,657), indicating either an overdraft or accounting treatment that warrants further clarity. This is a significant liquidity risk for an early-stage business.
• Operating Losses and Limited Equity: The profit and loss account shows a deficit (£1,412), and the share capital is minimal (£100). Combined with employee costs exceeding £102k, the company may be burning cash rapidly without a strong capital base.

3. Positive Indicators:

• Compliance with Filing Requirements: The company is up to date with both accounts and confirmation statement filings, indicating sound regulatory compliance.
• No Audit Required: The company qualifies for audit exemption under small companies rules, which is typical for a company of this size and age.
• Clear Ownership and Management: Directors and Persons with Significant Control are clearly identified, with no indications of disqualifications or governance issues.

4. Due Diligence Notes:

• Clarify Cash Position: Investigate the nature of the negative cash balance—whether it is an overdraft facility, accounting anomaly, or misclassification.
• Review Operating Model and Cash Flow Forecasts: Understand the company’s business plan, revenue generation, and how it plans to address negative working capital and funding needs.
• Assess Related Party Transactions: Given the small capital base and multiple directors/shareholders, examine transactions with related parties to identify potential risks or financial support arrangements.
• Confirm Completeness and Accuracy of Financials: As accounts are unaudited and abridged, verify that key financial data is accurate and consistent through management accounts or third-party verification.
• Evaluate Industry Risks: Operating in "Other food services" and "Take-away food shops" SIC codes, assess market conditions and competitive landscape that might impact operational viability.