O&A CONTRACTS LTD

Executive Summary

O&A Contracts Ltd exhibits significant financial distress as evidenced by a sharp decline in net current assets and shareholders’ funds in the latest year, raising high solvency and liquidity risks. Despite maintaining regulatory compliance and active status, the company’s operational sustainability appears fragile. Further investigation into the causes of financial deterioration and related party liabilities is strongly recommended before any investment consideration.

O&A CONTRACTS LTD - Analysis Report

Company Number: 12468691

Analysis Date: 2025-07-20 16:58 UTC

1. Risk Rating: HIGH
   The company’s financial data reveals a significant deterioration in net current assets from a positive £5,595 in 2022 to a negative £1,680 in 2023, indicating worsening short-term liquidity. Total assets less current liabilities have dropped dramatically from £9,947 to just £100, and shareholders’ funds have also declined sharply from £9,947 to £100. This suggests severe solvency risk and financial strain.

2. Key Concerns:

• Liquidity Shortfall: Negative net current assets imply the company may struggle to meet short-term obligations, increasing default risk.
• Declining Equity Base: Shareholders’ funds have almost entirely eroded, indicating losses or withdrawals that undermine the company’s financial stability.
• Director’s Loan Liability: The company owes the director £2,955, which is a related party liability and may complicate creditor priorities.

3. Positive Indicators:

• Current Filing Status: All statutory filings, including accounts and confirmation statements, are up to date with no overdue filings, indicating compliance with regulatory requirements.
• Active Trading Status: The company remains active and is not in liquidation or administration, which implies ongoing operations.
• Micro-Entity Accounting: Use of simplified micro-entity accounts reduces complexity and filing burden.

4. Due Diligence Notes:

• Investigate the cause of the drastic decline in current assets and equity between 2022 and 2023, including any unusual expenses or write-offs.
• Confirm the nature and terms of the director’s loan to assess repayment likelihood and impact on creditor claims.
• Assess the company’s cash flow forecasts and any plans to restore solvency or improve working capital.
• Review any contingent liabilities or off-balance-sheet obligations not reflected in the filings.
• Consider the absence of employees in the latest year and implications for operational capacity and revenue generation.