PABCO LIMITED

Executive Summary

PABCO LIMITED demonstrates significant financial stress with persistent negative working capital and declining net assets, raising high solvency and liquidity risk concerns. The unusual negative debtor balances and reliance on director loans warrant further investigation. While statutory compliance is maintained, the company’s financial position suggests operational sustainability risks without corrective actions.

PABCO LIMITED - Analysis Report

Company Number: 13231968

Analysis Date: 2025-07-20 16:25 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns as evidenced by persistent negative net current assets and a deterioration in net assets, moving from a positive £1,121 in 2024 to a negative £6,035 in 2025. The continual reliance on director loans and negative debtors figures further heighten risk.

2. Key Concerns:

• Negative net current assets for multiple years: This indicates that current liabilities exceed current assets by a wide margin, raising concerns about the company’s ability to meet short-term obligations.
• Negative debtor balances: The accounts show negative trade debtors (£9,330 in 2025), which is unusual and may suggest accounting irregularities or misclassifications that require clarification.
• Declining net assets and shareholders’ funds turning negative: This signals erosion of the company’s equity base and potential solvency issues.

3. Positive Indicators:

• The company is up to date with statutory filings (accounts and confirmation statement are not overdue).
• Operating with a very small workforce (1 employee) and low fixed assets, which may help reduce overhead costs.
• The director has legal responsibility and appears actively engaged, with no disqualifications noted.

4. Due Diligence Notes:

• Investigate the nature and cause of the negative debtor balances to understand whether this reflects accounting errors or underlying business issues.
• Clarify the terms and sustainability of director loans (£13,461 in 2025), including repayment plans and any potential for conversion to equity.
• Review cash flow statements and bank reconciliations (not provided) to assess liquidity dynamics beyond the snapshot balance sheet.
• Evaluate the business model and client contracts given the SIC code (management consultancy) and minimal staff, to assess operational viability.
• Confirm there are no pending legal or regulatory actions that might impact financial stability.