Company Number: 13844002

Analysis Date: 2025-07-20 16:16 UTC

1. Risk Rating: HIGH
   Justification: The company demonstrates extremely low net assets (£28 in 2025) and shareholders’ funds, indicating very thin equity and minimal financial buffer. Despite increasing turnover, the net assets erosion is a significant solvency concern. The company operates with only one employee and limited current assets, which raises liquidity and operational sustainability questions.

2. Key Concerns:

• Solvency Risk: Net assets have declined sharply from £1,296 (2024) to £28 (2025), signaling potential insolvency risk if liabilities increase or cash flow deteriorates.
• Profit Volatility: The reported profit dropped drastically from £141,544 (2024) to £14,732 (2025), suggesting operational instability or expense management issues, notably staff costs which rose markedly.
• Thin Capital Base: The company’s micro-entity status and minimal equity base offer limited protection to creditors and investors, increasing financial vulnerability.

3. Positive Indicators:

• Turnover Growth: Revenue increased steadily from £114,740 (2022) to £216,189 (2025), indicating some business growth and potential market acceptance.
• Current Assets exceeding Current Liabilities: Positive net current assets (£6,947 in 2025) suggest the company can meet short-term liabilities currently.
• No Overdue Filings: The company is up-to-date with both accounts and confirmation statement submissions, indicating regulatory compliance and governance diligence.

4. Due Diligence Notes:

• Verify the nature and timing of the significant increase in staff costs and other charges in 2025 to understand profitability compression.
• Investigate the composition of current assets and accruals/deferred income to assess actual liquidity and working capital quality.
• Assess the business model sustainability given reliance on a single director/employee and minimal capital resources.
• Confirm absence of related party transactions or contingent liabilities not disclosed.
• Review detailed cash flow statements if available to evaluate operational cash generation and financing needs.