PHOENIX FRIED CHICKEN LTD

Executive Summary

PHOENIX FRIED CHICKEN LTD is currently in a financially distressed position with negative net assets and a significant working capital deficit as of June 2024. Despite compliance with statutory filings, the company’s liquidity and solvency risks are elevated due to low cash reserves relative to liabilities and the absence of publicly available profitability data. Further detailed financial information is necessary to fully assess operational viability and risk.

PHOENIX FRIED CHICKEN LTD - Analysis Report

Company Number: 12700831

Analysis Date: 2025-07-20 15:40 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency concerns as evidenced by consistently negative net assets and net current liabilities exceeding current assets. The balance sheet shows net liabilities of approximately £31,333 as at 30 June 2024, which indicates an inability to meet short-term obligations from current assets. This points to a high risk of financial distress.

2. Key Concerns:

• Negative Net Assets and Working Capital Deficit: The company has net current liabilities of £31,333 and negative shareholders' funds by a similar amount, which worsened from previous years. This highlights a critical solvency risk.
• Low Cash Reserves Relative to Liabilities: Cash on hand is only £1,358 compared to current liabilities of £32,941, raising liquidity concerns for ongoing operational cash flow needs.
• Lack of Detailed Profit and Loss Information: No income statement is filed or publicly available, limiting visibility on profitability or operational cash generation, which increases uncertainty about sustainability.

3. Positive Indicators:

• Compliance with Filing Requirements: The company is up to date with its accounts and confirmation statement filings, reducing regulatory risk.
• Stable Director Appointment: The sole director has been in position since incorporation, suggesting consistency in management.
• Small Employee Base: With an average of 3 employees, the company may have a lower fixed cost base, potentially aiding financial flexibility.

4. Due Diligence Notes:

• Obtain detailed profit and loss and cash flow statements to assess operational performance and cash generation capacity.
• Investigate the nature and timing of current liabilities to understand if they include overdue creditor payments or short-term borrowings.
• Clarify the reasons behind persistent net liabilities and negative equity, including any shareholder loans or related party transactions.
• Review the business model and market conditions to evaluate if the negative financial position is due to start-up losses or structural issues.
• Confirm any contingent liabilities or off-balance sheet obligations that may exacerbate financial risk.