Company Number: 14204978

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

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risk, primarily due to very high current liabilities vastly exceeding current assets, resulting in large net current liabilities. This imbalance poses a serious risk to meeting short-term obligations.

2. Key Concerns:

• Negative Working Capital: The net current liabilities stand at approximately £235,000 as of June 2024, indicating a severe liquidity shortfall. Cash on hand is minimal (£440), raising concerns about the company's ability to cover immediate debts.
• Reliance on Investment Property Valuation: The only substantial asset is investment property valued at £250,000, which has increased recently by £39,708. The valuation is subject to market conditions and may not be readily convertible to cash in a timely manner.
• Historical Losses and Reserves: The company carried forward retained losses of around £25,000 even after reporting a profit in the latest year, with prior years showing negative shareholders’ funds. The capital structure is fragile, with only £2 in called-up share capital.

3. Positive Indicators:

• Recent Profit and Fair Value Gain: For the year ended June 2024, the company reported a profit of £39,008 and a fair value reserve increase of £32,164, turning net assets positive at £7,087 compared to prior years’ deficits.
• No Overdue Filings: The company is current on its accounts and confirmation statement filings, indicating compliance with statutory requirements.
• Small, Manageable Size: With only 2 employees on average and classification under the small companies regime, operational complexity and overheads may be limited.

4. Due Diligence Notes:

• Verify the Realisability of Investment Property: Assess liquidity and marketability of the property asset in the current real estate market to determine if it can be used to satisfy liabilities if needed.
• Examine Cash Flow Statements: Since no income statement was filed, review internal cash flow statements or management accounts to understand operational cash generation and timing of creditor payments.
• Investigate Nature and Terms of Creditors: Identify creditor types and payment terms for the large current liabilities (£236,483) to evaluate risk of enforcement action or insolvency.
• Assess Underlying Business Model and Sustainability: Clarify how the company intends to generate future profits and strengthen working capital given its current financial profile.
• Review Directors’ Background and Governance: Confirm no regulatory or governance issues exist, especially given the company’s fragile financial state.