Company Number: 15242439

Analysis Date: 2025-07-29 19:12 UTC

1. Risk Rating: HIGH
   Justification: The company shows significant liquidity and solvency concerns with net current liabilities of £326,917 against cash holdings of only £7,709. The current liabilities (£334,626) far exceed current assets, indicating potential difficulty in meeting short-term obligations. Additionally, net assets and shareholders funds are minimal, reflecting a weak financial position despite holding investment property.

2. Key Concerns:

• Liquidity Risk: The company’s cash position is extremely low relative to current liabilities, posing a risk of cash flow shortfalls.
• Solvency Risk: Negative net current assets suggest potential challenges in meeting debts as they fall due, raising concerns about ongoing financial viability.
• Related Party Creditors: A large portion (£311,505) of creditors are amounts owed to participating interests, which could indicate reliance on related party financing and possible governance or financial stability issues.

3. Positive Indicators:

• Investment Property Asset: The company holds an investment property valued at £333,000, providing a substantial fixed asset base which may support future refinancing or asset-backed lending.
• No Overdue Filings: Both accounts and confirmation statements were filed on time, indicating compliance with statutory requirements.
• Clear Ownership and Control: The two directors each hold 25-50% share and voting control, suggesting stable ownership without complex PSC structures.

4. Due Diligence Notes:

• Investigate the nature and terms of amounts owed to participating interests to assess related party risk and repayment likelihood.
• Review cash flow forecasts and working capital management plans to evaluate how the company intends to address current liabilities.
• Confirm valuation methodology for investment property and the realizability of this asset in a distressed scenario.
• Assess directors’ plans for improving profitability or capital structure given the negative retained earnings and minimal net assets.
• Verify absence of contingent liabilities or off-balance sheet obligations that could exacerbate financial risks.