Company Number: SC678641

Analysis Date: 2025-07-20 13:31 UTC

1. Risk Rating: MEDIUM
   The company shows a positive net asset position and an increase in equity, but consistent net current liabilities and significant long-term loans secured on assets suggest some solvency and liquidity risks. The absence of audit and reliance on small company exemptions limit transparency.

2. Key Concerns:

• Liquidity Risk: Net current liabilities of £57,040 (2024) indicate short-term obligations exceed current assets, potentially stressing cash flow despite a reasonable cash balance (£91,169).
• Leverage and Debt Burden: Total loans secured on assets amount to £111,697 with a notable reduction from prior year (£217,556), but still material relative to net assets (£188,822). Repayment capacity and debt servicing need scrutiny.
• Limited Financial Disclosure and Audit Exemption: Being a small company with total exemption from audit reduces external assurance on financials, increasing risk of undetected issues or aggressive accounting estimates.

3. Positive Indicators:

• Growing Net Assets and Equity: Shareholders’ funds increased from £107,134 (2023) to £188,822 (2024), indicating retained profitability or capital injection.
• Healthy Cash Position: Cash at bank improved significantly from £58,674 to £91,169 year-on-year, which supports operational liquidity.
• Stable Management: Continuous directorship of two directors since incorporation with no reported disqualifications or governance concerns.

4. Due Diligence Notes:

• Investigate the nature and terms of secured loans, including repayment schedules and covenants, to assess refinancing or default risk.
• Review cash flow statements and working capital management to understand how the company manages current liabilities exceeding current assets.
• Obtain more detailed profit and loss information and consider credit terms with suppliers and customers to validate revenue recognition and debtor quality.
• Confirm if any contingent liabilities or off-balance-sheet obligations exist that could impact solvency.
• Assess the impact of the company’s exemption from audit on the reliability of financial data and consider requesting an independent review or assurance.