NARLAH FARM LIMITED

Executive Summary

Narlah Farm Limited is currently facing high financial risk due to its deteriorating net asset position and persistent liquidity shortfall. The company’s continuation depends on director support, indicating operational fragility. Although statutory compliance is maintained, further analysis of financial health and funding arrangements is necessary to assess investment suitability.

NARLAH FARM LIMITED - Analysis Report

Company Number: 12612403

Analysis Date: 2025-07-20 18:25 UTC

1. Risk Rating: HIGH
   The company exhibits a persistently negative net asset position that has deteriorated over recent years, coupled with significant net current liabilities. These indicators point towards solvency challenges and raise serious concerns about the company’s ability to meet its short-term obligations without external support.

2. Key Concerns:

• Negative Net Assets: The company’s net liabilities have increased from approximately £9,400 in 2020 to about £46,400 in 2024, indicating ongoing losses or capital erosion.
• Liquidity Deficit: Current liabilities consistently exceed current assets by a considerable margin (net current liabilities of approximately £54,800 in 2024), suggesting potential cash flow issues to cover short-term debts.
• Going Concern Dependence: The directors explicitly state that the company’s continued operation relies on their financial support, which is a red flag for operational sustainability and independence.

3. Positive Indicators:

• Timely Filing: The company is up to date with its statutory accounts and confirmation statements, indicating compliance with filing requirements.
• Stable Management: Both directors have been in place since incorporation, providing consistency in leadership.
• Micro Entity Classification: As a micro-entity, the company benefits from simplified reporting and potentially lower administrative burdens, which might aid cost control.

4. Due Diligence Notes:

• Investigate Directors’ Support Arrangements: Clarify the nature, terms, and sustainability of the directors’ financial backing to assess the reliability of the going concern assumption.
• Review Profit and Loss Trends: Obtain detailed profit and loss accounts to understand the root causes of the increasing net liabilities and whether there are plans to return to profitability.
• Assess Cash Flow Projections: Examine management’s cash flow forecasts and working capital management strategies to evaluate short-term liquidity risks.
• Examine Creditors’ Terms: Understand the composition and terms of the current liabilities to determine if any restructuring or renegotiation is underway or necessary.
• Confirm No Director Disqualifications: Verify that the current directors have no disqualification records or regulatory issues.

Executive Summary:
Narlah Farm Limited demonstrates significant solvency and liquidity risks evidenced by growing net liabilities and substantial current liabilities exceeding current assets. The company’s ongoing viability depends heavily on director support, raising concerns about operational stability without external funding. While compliance filings are current and leadership stable, a detailed review of financial performance and cash flow sustainability is essential before considering investment exposure.