NOVE SOLUTIONS LIMITED

Executive Summary

The latest financial statements for NOVE SOLUTIONS LIMITED reveal a concerning shift to negative net assets due to significant deferred income, posing solvency risks despite improved working capital. The company operates at a very small scale with no employees and a concentrated ownership structure. Continued monitoring of cash flows and accrual accounting is advisable to assess ongoing viability.

NOVE SOLUTIONS LIMITED - Analysis Report

Company Number: 13833974

Analysis Date: 2025-07-20 14:02 UTC

1. Risk Rating: HIGH
   The company’s net assets have turned negative (£-12,865) as at 31 January 2024, primarily due to significant accruals and deferred income (£41,012) exceeding net current assets. This indicates solvency concerns despite an increase in current assets. The absence of employees and reliance on a single director further heightens operational risk.

2. Key Concerns:

• Negative Net Assets: The company moved from positive net assets (£6,079) in 2023 to a negative position in 2024, which suggests erosion of capital and potential insolvency risk.
• Accruals and Deferred Income: The large accruals/deferred income balance (£41,012) creates a mismatch that suppresses net assets and may reflect unearned revenue or accounting timing issues impacting financial stability.
• Operational Scale and Sustainability: The company employs no staff currently and has a sole director who is also a significant shareholder, indicating limited operational capacity and potential governance concentration risk.

3. Positive Indicators:

• Improved Working Capital: Current assets increased from £31,693 to £52,704, and net current assets improved to £28,147, suggesting better short-term liquidity before considering accruals.
• Timely Filings: Both accounts and confirmation statements are filed on time, indicating compliance with statutory requirements and no immediate regulatory concerns.
• Clear Ownership Structure: Ownership and control are transparent, with two known significant controllers, which supports governance clarity despite concentration.

4. Due Diligence Notes:

• Investigate the nature and timing of accruals and deferred income to understand their impact on cash flow and solvency risk.
• Assess cash flow statements (not provided) to evaluate liquidity beyond the balance sheet and confirm the ability to meet short-term obligations.
• Review contracts or client arrangements tied to deferred income to verify revenue recognition policies and future cash inflows.
• Confirm the director’s plans for operational scaling or capital injections given the negative equity and zero employees.
• Verify if any related party transactions exist between the PSCs and the company, which may affect financial position or governance.