Company Number: 13887687

Analysis Date: 2025-07-20 17:07 UTC

1. Risk Rating: HIGH
   The company shows negative net assets (shareholders’ funds) for both 2023 and 2024 financial years, indicating insolvency on a balance sheet basis. The magnitude of liabilities exceeding assets increases substantially from 2023 to 2024, signaling deteriorating financial health despite being a micro-entity.

2. Key Concerns:

• Solvency Risk: Net assets are negative (£-5,707 in 2024) due to large amounts of creditors falling due after one year (£39,532), which suggests the company’s liabilities significantly exceed its assets. This raises doubt about its ability to meet long-term obligations.
• Liquidity Issues: Current liabilities are relatively high compared to current assets, although net current assets are positive (£7,430). However, the large long-term creditor figure may pressure liquidity in the future.
• Operational Scale and Stability: The company has only one employee on average and minimal fixed and current assets, which may limit its capacity to sustain operations or absorb shocks. Also, the company is very young (incorporated 2022), so there is limited operating history to assess sustainability.

3. Positive Indicators:

• Compliance: The company is up to date with filing accounts and confirmation statements, with no overdue filings or penalties noted.
• Ownership and Control: A single director and 75-100% shareholder (Mr. Irfan) provides clear leadership and control which can facilitate decision-making and quick corrective actions if needed.
• Industry Focus: The company operates in furniture and mattress manufacturing (SIC 31090, 31030), sectors with steady demand, which could provide opportunities for growth if managed well.

4. Due Diligence Notes:

• Investigate the nature and terms of the long-term creditors (£39,532) to understand repayment schedules, covenants, and risk of enforcement actions.
• Review cash flow statements and bank balances to assess liquidity beyond balance sheet numbers.
• Evaluate the business model and revenue streams given the micro size and single employee headcount to understand operational sustainability.
• Confirm if any related party transactions or director loans contribute to the liabilities or assets.
• Assess future business plans, order book, or contracts to gauge prospects for improving financial position.