Company Number: 12695529

Analysis Date: 2025-07-20 14:49 UTC

1. Risk Rating: MEDIUM

The company shows modest net assets and current assets exceeding current liabilities, indicating short-term solvency. However, the significant decline in net assets from £2,405 in 2020 to £126 in 2024 signals potential erosion of equity and financial strength. The small scale of operations and minimal share capital also contribute to a moderate risk profile.

2. Key Concerns:

• Declining Net Assets: A steep drop in net assets over four years (from £2,405 to £126) suggests the company’s retained earnings or capital base is diminishing, which may impact long-term solvency.
• Low Capitalization: Share capital of only £1.00 and minimal equity buffer could limit the company's ability to absorb financial shocks or fund growth.
• Limited Financial Detail: As a micro-entity filing filleted accounts, lack of profit and loss data restricts assessment of profitability and operational cash flow, increasing uncertainty about sustainability.

3. Positive Indicators:

• Current Assets Exceed Current Liabilities: Net current assets remain positive (£764 as of 2024), indicating the company can meet short-term obligations.
• On-Time Filings: No overdue accounts or confirmation statements, reflecting compliance with statutory requirements and good governance.
• Active Status & Single Director Control: The company is active, with a sole director who is also the person with significant control, which can streamline decision-making.

4. Due Diligence Notes:

• Profitability and Cash Flow: Obtain detailed profit and loss accounts or management accounts to evaluate earnings trends and liquidity beyond balance sheet snapshots.
• Reason for Equity Decline: Investigate causes of the steady decline in net assets, including any losses, distributions, or write-downs.
• Operational Viability: Assess client base, contracts, and revenue streams to confirm sustainable operations given the small employee base.
• Director’s Background and Capacity: Review director’s experience and any potential conflicts or risks given sole control and responsibility.