Company Number: SC679695

Analysis Date: 2025-07-29 13:04 UTC

1. Risk Rating: MEDIUM
   The company shows modest net current assets and net assets with a positive but limited equity base, indicating solvency but with limited financial buffer. The absence of overdue filings and continuous active status are positive. However, relatively low shareholder funds and a high proportion of current liabilities to current assets suggest some liquidity constraints that warrant attention.

2. Key Concerns:

• Liquidity Position: The company’s net current assets are positive but small (£1,214 as of 31 March 2025), with current liabilities (£13,947) close to current assets (£15,161). This tight working capital situation could cause cash flow strain if receivables collection slows or expenses spike.
• Concentration of Control and Financial Risk: The sole director and 75-100% shareholder is the same individual, which may raise governance issues and operational dependency risks. Related party balances such as the director’s account (£5,118) form a significant portion of current liabilities, which could reflect informal financing arrangements rather than independent third-party debt.
• Modest Capital Base and Small Scale: The share capital is minimal (£100), and turnover information is not provided, but the company is filing under the small companies regime with limited assets and only 2 employees. This suggests a small scale operation with limited financial resilience to adverse events or growth requirements.

3. Positive Indicators:

• Timely Compliance: No overdue accounts or confirmation statements, indicating good regulatory compliance and governance in terms of filing obligations.
• Positive Net Assets Growth: Shareholders’ funds have increased steadily from £277 in 2021 to £1,214 in 2025, reflecting retained profits and potentially improving business performance.
• Cash Holdings: Cash balances have improved from £8,936 in 2024 to £13,266 in 2025, providing some liquidity cushion despite the tight working capital position.

4. Due Diligence Notes:

• Obtain detailed turnover and profit & loss account data to assess operational profitability and revenue trends as turnover figures are not presented in the filleted accounts.
• Clarify the nature and terms of the director’s account balance within current liabilities to understand the potential impact on liquidity and related party transactions.
• Review any contingent liabilities or off-balance sheet commitments that might not be disclosed in the filleted accounts but could impact solvency or liquidity.
• Evaluate the company’s client base and contract stability given the SIC codes indicating specialised design and bookkeeping activities, to assess revenue sustainability.
• Consider governance arrangements and potential risks arising from single director ownership structure.