MEITHRINFA DO RE MI NURSERY CYF

Executive Summary

Meithrinfa Do Re Mi Nursery Cyf has demonstrated a significant turnaround in financial position in the latest year, improving from negative to positive net assets and reducing current liabilities substantially. While this reduces immediate solvency risk, the historical negative equity and limited financial disclosures warrant cautious monitoring of liquidity and operational sustainability. The company maintains good regulatory compliance and a stable operational scale consistent with its micro-entity classification.

MEITHRINFA DO RE MI NURSERY CYF - Analysis Report

Company Number: 13040044

Analysis Date: 2025-07-20 11:13 UTC

1. Risk Rating: MEDIUM
   The company shows a significant improvement in financial position in the latest year, moving from negative shareholders’ funds to a positive net equity position. However, the prior years’ history of negative equity and large current liabilities relative to current assets suggest some past solvency challenges. The micro-entity status limits detailed disclosures, and the company remains small-scale with modest asset levels.

2. Key Concerns:

• Previous Negative Equity: The company had shareholders’ funds of -£18,526 in both 2021 and 2022, indicating past insolvency or accumulated losses that may affect creditor confidence.
• Working Capital Volatility: Although current liabilities dropped significantly from £38,190 in 2022 to £7,485 in 2023, current assets also decreased. The balance is positive but tight, warranting monitoring of liquidity and cash flow.
• Limited Financial Transparency: As a micro-entity, the accounts are unaudited and prepared under simplified provisions, which restricts visibility into profitability, cash flows, and contingent liabilities.

3. Positive Indicators:

• Strong Recovery in Net Assets: Shareholders’ funds improved markedly to £30,602 as of November 2023, driven by increased fixed assets and reduced liabilities.
• Stable Operational Scale: The nursery employs around 11 staff, indicating a stable operational base consistent with its industry.
• Timely Filings and Compliance: The company is current with both accounts and confirmation statement filings, demonstrating regulatory compliance and governance diligence.

4. Due Diligence Notes:

• Review detailed cash flow data and profit & loss statements (not available here) to confirm sustainable profitability and liquidity trends.
• Investigate the nature and source of the increase in fixed assets and the reduction in current liabilities between 2022 and 2023.
• Confirm any contingent liabilities or off-balance sheet obligations that may impact solvency.
• Verify director backgrounds and any associated party transactions given the company’s private ownership structure.