Company Number: 12636141

Analysis Date: 2025-07-29 14:34 UTC

1. Risk Rating: MEDIUM
   The company shows a positive net asset position and working capital, but a notable increase in long-term liabilities and low cash balances relative to current liabilities introduce moderate solvency and liquidity risks.

2. Key Concerns:

• Liquidity constraints: Cash at bank is low (£13,005) compared to current liabilities (£184,416), which may pressure short-term cash flow despite positive net current assets due to large debtor balances.
• Reliance on related party balances: Significant debtors (£327,277) are amounts owed by group undertakings, which are unsecured, interest-free, and repayable on demand, raising concerns about collectability and actual liquidity.
• Increasing long-term debt: The emergence of £107,112 in bank loans payable after more than one year, which was not present in the prior year, could increase financial burden and leverage risk.

3. Positive Indicators:

• Net assets have improved substantially from a negative position in 2021 to £217,272 in 2024, indicating strengthening equity and solvency.
• The company maintains positive net current assets (£157,176) and has revalued investment property upwards, suggesting asset value growth.
• No overdue filings and timely compliance with both accounts and confirmation statements demonstrate good regulatory adherence.

4. Due Diligence Notes:

• Verify the collectability and liquidity value of debtors due from group undertakings, including the financial health of the related entities.
• Assess the terms, interest rates, and repayment schedule of the long-term bank loan of £107,112 to understand future cash flow implications.
• Review the company's cash flow statements and rental income stability to confirm operational sustainability given low cash reserves.
• Confirm no director disqualifications or adverse governance issues given the small size and related-party transactions.