PAWS HQ LTD

Executive Summary

PAWS HQ LTD shows improving financial health with positive net assets and current assets exceeding liabilities as of September 2024. Nonetheless, the low cash balance relative to liabilities and emerging tax debt present liquidity risks that require further investigation. Operational sustainability remains uncertain due to limited history and minimal disclosure on business activities.

PAWS HQ LTD - Analysis Report

Company Number: 14333991

Analysis Date: 2025-07-29 20:53 UTC

1. Risk Rating: MEDIUM
   The company shows moderate solvency with positive net assets and net current assets in the latest accounts, improving from a prior year negative working capital. However, cash reserves are low relative to current liabilities, and tax liabilities have emerged recently, warranting caution.

2. Key Concerns:

• Liquidity Risk: Cash on hand (£1,226) is minimal compared to current liabilities (£4,980), suggesting potential short-term cash flow strain.
• Tax Liabilities: The presence of a corporation tax creditor of £3,063 in 2024, not previously recorded, could indicate recent profitability or tax payment delays impacting liquidity.
• Limited Financial History: Having only two years of financial data since incorporation in 2022 limits trend analysis and confidence in operational stability.

3. Positive Indicators:

• Improved Working Capital: Net current assets improved from a deficit of £275 in 2023 to a positive £1,246 in 2024, indicating better short-term financial management.
• Positive Net Assets: Net assets more than tripled to £3,110 in 2024, reflecting growth in tangible assets and retained earnings.
• No Overdue Filings: All accounts and confirmation statements are filed on time, demonstrating compliance and governance diligence.

4. Due Diligence Notes:

• Investigate the nature and timing of the corporation tax liability and confirm the company’s tax payment history and future tax obligations.
• Review cash flow statements and banking arrangements to assess liquidity management and availability of credit facilities.
• Clarify revenue streams and profitability drivers given the SIC code "Other service activities not elsewhere classified," to understand business sustainability and market positioning.
• Confirm the director’s capacity given the sole director’s occupation outside typical business management and the company’s small scale.
• Verify stock valuation and turnover, as stock represents a significant proportion of current assets (£5,000 of £6,226).