Company Number: 12388848

Analysis Date: 2025-07-20 18:58 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits significant net current liabilities and net negative assets with deteriorating financial position over recent years. The working capital deficit, negative shareholders’ funds, and reliance on director loans indicate elevated solvency and liquidity risk.

2. Key Concerns:

• Persistent and growing net current liabilities: From (£28,675) in 2021 to £72,986 in 2024, indicating severe liquidity constraints.
• Negative net assets and shareholders’ funds worsening from £17,239 positive in 2021 to (£50,933) negative in 2024, suggesting erosion of capital and solvency issues.
• Substantial director loan accounts (£38,337) and bank overdrafts (£23,042) contribute heavily to current liabilities, raising questions on the sustainability of financial support and potential financial distress.

3. Positive Indicators:

• The company is active, not in liquidation or administration, and filings are up to date, indicating regulatory compliance and operational continuity.
• Fixed assets remain tangible and sizeable (£27,935 net book value), which could provide some collateral value.
• The company operates in the licensed restaurant sector, which, if managed well, can generate steady cash flows.

4. Due Diligence Notes:

• Investigate the nature and terms of the director loan account: Is it repayable on demand, interest-bearing, and what is the director’s willingness and capacity to continue support?
• Assess the company’s cash flow forecasts and operational plans to address the large working capital deficit and negative equity position.
• Review any contingent liabilities or off-balance sheet obligations not disclosed that could exacerbate financial strain.
• Evaluate turnover trends and profitability details (not provided here) to gauge operational sustainability.
• Confirm no related-party transactions or governance concerns, especially given the concentration of control in one director.