OUTER PATH LTD

Executive Summary

Outer Path Ltd exhibits significant financial distress characterized by persistent negative equity and working capital deficits, raising high solvency and liquidity risks. While the company complies with regulatory requirements and maintains a small stable workforce, its dependence on director loans and ongoing losses warrant close scrutiny of its financial sustainability and operational viability.

OUTER PATH LTD - Analysis Report

Company Number: 12513271

Analysis Date: 2025-07-20 11:44 UTC

1. Risk Rating: HIGH
   The company shows persistent negative net assets and net current liabilities over multiple years, indicating solvency and liquidity challenges. The working capital deficit and reliance on director loans further elevate financial risk.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Funds: The company has reported accumulated losses resulting in negative equity (£-5,558 as at 31 March 2025), which raises concerns about its long-term solvency.
• Consistent Working Capital Deficits: Net current liabilities remain significantly negative (£-9,483 in 2025), suggesting ongoing liquidity issues and a potential inability to meet short-term obligations without external funding.
• Director Loans Dependency: Loans from directors constitute a large portion (£10,919) of current liabilities, which may indicate reliance on insider funding for operational continuity and potential risk if such support is withdrawn.

3. Positive Indicators:

• Timely Filing and Compliance: The company is current with its accounts and confirmation statement filings, demonstrating good regulatory compliance and governance practices.
• Stable Employee Base: The company maintains a consistent workforce of two employees, which may indicate controlled operational scale and cost base.
• Active Website and Market Presence: The business operates in advertising and management consultancy, with an active website indicating ongoing trading activities and client engagement.

4. Due Diligence Notes:

• Investigate the nature and terms of director loans, including repayment plans and whether these loans are likely to be sustained or converted to equity.
• Review cash flow forecasts and management plans to address persistent liquidity deficits and improve working capital positions.
• Examine the business model viability and revenue trends given ongoing losses and negative equity to assess future operational sustainability.
• Confirm no undisclosed contingent liabilities or impending regulatory issues given the company’s financial distress signals.