Company Number: 13847327

Analysis Date: 2025-07-29 12:50 UTC

1. Risk Rating: MEDIUM
   Masala Care Limited demonstrates a modest net asset position but experiences recurring negative net current assets, indicating liquidity constraints. The company is relatively new (incorporated 2022) and operates in a competitive sector with micro-entity financial reporting, limiting detailed disclosures.

2. Key Concerns:

• Liquidity Risk: The company has negative net current assets (£-8,573 as of 31 January 2024), implying current liabilities exceed current assets, which may jeopardize meeting short-term obligations.
• Volatility in Accruals and Deferred Income: A significant increase in accruals and deferred income from £16,260 in 2023 to £2,200 in 2024 suggests changes in revenue recognition or prepayments that require clarification.
• Limited Financial Transparency: As a micro-entity, accounts are unaudited with minimal disclosures, restricting comprehensive financial and operational assessment.

3. Positive Indicators:

• Positive Net Assets and Shareholders' Funds: Net assets increased from £1,336 in 2023 to £4,227 in 2024, showing some capital build-up or retained earnings.
• No Overdue Filings: Both accounts and confirmation statements are up to date, indicating compliance with Companies House requirements.
• Stable Management and Control: Directors are consistent since incorporation, with clear ownership and control structure involving two British nationals without disqualification records evident.

4. Due Diligence Notes:

• Examine Cash Flow Statements and Working Capital Management: To better understand liquidity challenges and how current liabilities are being managed given negative net current assets.
• Clarify Nature of Accruals and Deferred Income: Investigate what these balances represent and their impact on future cash flows and revenue recognition.
• Review Business Model and Market Position: Given the company's sector (licensed restaurants and takeaway food), assess competitive landscape, customer base stability, and growth prospects.
• Assess Directors’ Backgrounds and Related Party Transactions: Ensure no conflicts of interest or undisclosed liabilities exist, given the close control by two directors with significant shareholdings.