P AND N 3 LIMITED

Executive Summary

P AND N 3 LIMITED faces high liquidity and solvency risks due to substantial negative net current assets and current liabilities heavily reliant on group undertakings funding. While the company maintains compliance with statutory filings and holds tangible assets, its short-term financial position raises concerns about operational sustainability without further capital support or improved cash flow management. Further due diligence on intra-group liabilities and cash flow plans is advised before considering investment.

P AND N 3 LIMITED - Analysis Report

Company Number: NI675015

Analysis Date: 2025-07-20 15:17 UTC

1. Risk Rating: HIGH
   The company exhibits significant liquidity risk and solvency concerns, as evidenced by its large negative net current assets and current liabilities substantially exceeding its cash reserves. The financial position suggests difficulty in meeting short-term obligations.

2. Key Concerns:

• Negative Net Current Assets: The company’s net current assets are deeply negative (£-271,700 in 2023), indicating that current liabilities far exceed current assets, raising concerns about short-term liquidity and ability to cover upcoming debts.
• High Current Liabilities Relative to Cash: Current liabilities stand at £302,877 while cash balances are only £31,177, signaling potential cash flow stress.
• Reliance on Amounts Owed to Group Undertakings: A large portion (£300,000) of current liabilities comprise amounts owed to group undertakings, which may pose a risk if intra-group funding is withdrawn or not renewed.

3. Positive Indicators:

• Tangible Fixed Assets: The company holds tangible assets valued at £300,000, which provides some collateral value and may support solvency in the longer term.
• No Overdue Filings: The company is compliant with statutory filing deadlines for accounts and confirmation statements, indicating good regulatory compliance.
• No Audit Exemption Risk: The company qualifies for audit exemption under the small companies regime, consistent with its size and reporting obligations.

4. Due Diligence Notes:

• Investigate the nature and terms of the amounts owed to group undertakings to understand repayment schedules and whether these liabilities are short-term or can be extended.
• Assess cash flow forecasts and working capital management to determine how the company plans to address its negative net current assets position.
• Review related party transactions in detail to ensure transparency and fairness, especially given the significant intra-group liabilities.
• Confirm whether the tangible assets are encumbered or free of liens, and their market realizable value.
• Examine directors’ plans or strategies to improve liquidity or solvency, including any anticipated capital injections or refinancing.