Company Number: 13245170

Analysis Date: 2025-07-20 13:00 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns, highlighted by persistent negative net current assets and a substantial increase in current liabilities over the last financial year. The total liabilities exceeding current assets and rising debt levels signal elevated financial risk.

2. Key Concerns:

• Negative net current assets of £13,886 at year-end 2024 (compared to -£2,118 in 2023), indicating liquidity stress and potential difficulty meeting short-term obligations.
• Sharp increase in current liabilities from £13,596 (2023) to £25,959 (2024), driven largely by directors’ current accounts (£16,698) and VAT liabilities (£2,519), suggesting reliance on director funding and possible cash flow constraints.
• Introduction of £6,018 long-term bank loans in 2024, adding financial leverage and future repayment obligations that may further strain cash flows.

3. Positive Indicators:

• The company has maintained timely and up-to-date statutory filings, including accounts and confirmation statements, indicating compliance with regulatory requirements.
• Fixed assets increased notably, reflecting investment in plant and machinery, which could enhance operational capacity and revenue generation potential.
• Stable employee count (6 employees) suggests operational continuity without recent workforce reductions.

4. Due Diligence Notes:

• Investigate the nature and terms of the directors’ current accounts balances to understand whether these represent ongoing financial support or repayment obligations.
• Review cash flow statements or bank statements (not provided) to assess actual liquidity and working capital management.
• Clarify the purpose and terms of the new bank loan facility and its impact on future cash flows.
• Understand debtor composition and recovery prospects given the consistent £10,000 debtor figure over multiple years.
• Evaluate the company’s profitability and revenue trends (not disclosed) to determine if operational losses are driving equity erosion.

Executive Summary:
Physique-Fit Ltd shows increasing financial stress primarily due to its negative working capital and growing liabilities, raising concerns about its short-term solvency and liquidity position. Despite investment in fixed assets and regulatory compliance, the company’s elevated debt levels and reliance on director funding warrant close scrutiny before considering investment. Further analysis of cash flow and operational performance is essential to assess sustainability.