Company Number: 12597701

Analysis Date: 2025-07-29 14:42 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns, evidenced by large negative net current assets and shareholders’ funds consistently deteriorating over recent years.

2. Key Concerns:

• Severe Net Current Liability Position: As of 31 May 2024, net current liabilities are £58,413, indicating the company’s current liabilities exceed its current assets by a substantial margin, raising major liquidity risk.
• Negative Shareholders’ Funds and Net Assets: Shareholders’ funds stand at approximately -£57,322, reflecting accumulated losses and negative equity which threatens long-term solvency.
• High Reliance on Director Loans: Creditors within one year include a director loan of £64,173, which suggests the company depends heavily on related party financing to meet obligations, a potential red flag regarding sustainable external funding.

3. Positive Indicators:

• Compliance with Filing Requirements: The company is up to date with annual accounts and confirmation statements, indicating no immediate regulatory compliance issues.
• Steady Small Workforce: The company maintains an average of 2 employees, which suggests an operational scale appropriate for a small business and potentially controlled overheads.
• Tangible Fixed Assets Growth: The increase in plant and machinery net book value to £1,101 from £155 the previous year suggests ongoing investment in operational capacity.

4. Due Diligence Notes:

• Nature and Terms of Director Loans: Investigate the conditions, repayment schedules, and security (if any) related to director loans to assess risk exposure and potential for recovery or further financing needs.
• Cash Flow and Profit & Loss Details: Review detailed profit and loss accounts and cash flow statements to understand operational profitability, revenue trends, and cash management practices.
• Future Business Plans and Funding Strategy: Assess management’s plans to address negative equity and liquidity shortfalls, including any expected capital injections or refinancing arrangements.
• Creditors and Debtor Aging: Analyze aging of creditors and debtors to evaluate working capital management efficiency and risk of bad debts or supplier pressure.
• Market and Industry Position: Given the SIC codes relating to retail and manufacture of motor vehicle parts, evaluate competitive positioning and any external market pressures impacting sustainability.

Executive Summary
Nforcd Ltd is facing significant financial distress characterized by persistent negative net assets and net current liabilities, heavily reliant on director loans for liquidity. While the company maintains compliance with statutory filings and shows modest asset investment, the financial data indicates high solvency and liquidity risks that require close scrutiny of funding arrangements and operational viability. Further due diligence should focus on cash flow dynamics and management’s strategy for financial recovery.