Company Number: 13598790

Analysis Date: 2025-07-20 14:21 UTC

1. Risk Rating: MEDIUM
   Justification: The company shows a significant deterioration in net current assets from positive £8,608 in 2023 to negative £47,569 in 2024, indicating liquidity stress. Although net assets remain positive (£34,989), the working capital deficit and high short-term liabilities relative to current assets raise concerns about the company’s ability to meet immediate obligations without additional funding.

2. Key Concerns:

   1. Liquidity Decline – The sharp drop in cash and current assets (from £134k to £57k) alongside rising current liabilities (£125k to ~£105k) signals potential cash flow difficulties.
   2. Related Party Balances – Substantial and persistent loans owed to related parties (£21,992) and directors (£7,086) with no interest charged and repayable on demand could mask underlying funding issues and future cash outflows.
   3. Profit and Loss Omission – The company has taken exemption from filing the profit and loss account, limiting insight into operational profitability and cash generation, making it harder to assess sustainability.

3. Positive Indicators:

   1. Positive Net Assets – Despite liquidity issues, shareholders’ funds remain positive at nearly £35k, implying the company is not insolvent at balance sheet date.
   2. Stable Employee Base – The company maintains a consistent workforce of 20 employees, suggesting operational continuity.
   3. No Overdue Filings – Both accounts and confirmation statements are filed on time, indicating regulatory compliance and governance discipline.

4. Due Diligence Notes:

   1. Review management accounts or internal cash flow forecasts to assess ongoing liquidity and working capital management.
   2. Investigate the nature, terms, and future plans for settling related party loans and director balances.
   3. Obtain or request the profit and loss account or other performance indicators to understand profitability and cash generation trends.
   4. Confirm no contingent liabilities or off-balance sheet commitments beyond those disclosed, especially given the provisions for liabilities.
   5. Validate that the company’s going concern assumption remains appropriate given the liquidity pressures.