Company Number: 12732121

Analysis Date: 2025-07-20 13:03 UTC

1. Risk Rating:
   MEDIUM
   Mezz One Ltd demonstrates a stable equity base with positive net assets and net current assets, indicating an ability to meet short-term obligations. However, the level of long-term creditors and a relatively modest cash balance relative to current liabilities suggest moderate solvency and liquidity risk. The company is relatively young and small, with limited filing requirements and unaudited accounts, which adds to due diligence complexity.

2. Key Concerns:

• High Long-Term Creditors: The company has significant creditors due after more than one year (£134,404 in 2024), which could pressure future cash flows and solvency if not carefully managed.
• Decline in Debtors and Stock Levels: A sharp reduction in debtors from £81,355 to £28,279 and a reduction in stock from £320,000 to £300,000 may indicate tighter sales or collection issues that require monitoring to avoid cash flow stress.
• Director Turnover: The resignation of a previously appointed director in October 2023 suggests some instability in management, which could impact operational continuity or governance.

3. Positive Indicators:

• Net Current Assets Improvement: Net current assets increased from £158k to £182k, indicating improved short-term liquidity and working capital management.
• Growth in Shareholders’ Funds: Shareholders’ funds increased from £59k to £92k, reflecting retained earnings growth and strengthening equity.
• Compliance and Filing Status: All accounts and confirmation statements are filed on time with no overdue filings, indicating good compliance with statutory requirements.
• Increase in Cash Reserves: Cash at bank increased substantially from £14k to £42k, improving immediate liquidity availability.

4. Due Diligence Notes:

• Examine Long-Term Debt Terms: Review the nature, covenants, and repayment schedules of the creditors falling due after one year to assess refinancing or repayment risks.
• Assess Cash Flow Trends: Investigate operational cash flows and debtor collection practices due to significant debtor reduction to confirm sustainable liquidity.
• Management Stability: Clarify reasons for director resignations and assess current management team’s capability and stability.
• Stock Valuation: Since stock values are significant (£300k), verify valuation methods and turnover rates to ensure inventory is not overstated or obsolete.
• Verify Going Concern Assumptions: Although accounts are prepared on a going concern basis, verify underlying assumptions given the company’s financial position and creditor levels.

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