Company Number: 13158250

Analysis Date: 2025-07-20 12:41 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits significant net current liabilities that have worsened markedly over the latest fiscal year, indicating liquidity stress. Additionally, the presence of long-term creditors and very low net asset value relative to liabilities suggests solvency concerns. The minimal share capital and micro-entity status imply limited financial buffer.

2. Key Concerns:

• Liquidity risk: Current liabilities (£174,556) substantially exceed current assets (£54,641) as of January 2024, resulting in a negative working capital of £119,915, a deterioration from the prior year. This gap raises concerns about the company’s ability to meet short-term obligations.
• Solvency risk: Total net assets remain very low (£4,032), despite some growth from previous years, and there are significant creditors due after more than one year (£11,737). The decrease in total assets less current liabilities from £117,117 to £15,769 within one year is alarming.
• Operational sustainability: The company operates in retail (SIC 47110) with a small workforce (average 5 employees). The financial trend shows shrinking current assets and increasing liabilities, which could impact ongoing operations and supplier relationships.

3. Positive Indicators:

• The company remains active and compliant with filing deadlines, with no overdue accounts or confirmation statements, indicating proper governance in reporting.
• Shareholders’ funds have increased slightly, showing some retained earnings or capital infusion despite operating pressures.
• The presence of two directors with significant control, one appointed recently, could suggest an active management effort to stabilize or grow the business.

4. Due Diligence Notes:

• Investigate the nature and terms of current and long-term liabilities to understand repayment schedules, creditor composition, and any potential covenant breaches.
• Review cash flow statements (not provided) to assess operational cash generation versus liabilities due.
• Verify if there are any contingent liabilities, related party transactions, or off-balance sheet obligations that may exacerbate financial risk.
• Assess the company’s business model viability given the retail sector challenges and relatively small scale.
• Confirm any ongoing legal or regulatory issues that might impact financial stability or reputation.