PMC 3 LIMITED

Executive Summary

PMC 3 Limited faces significant liquidity and solvency risks evidenced by persistent negative net current assets and reliance on director loans for working capital. While compliance with filing deadlines and a going concern assumption are positive signs, the company's financial position suggests operational and funding challenges that warrant careful further review. Investors should conduct detailed due diligence on cash flows, director loan terms, and profitability before considering investment.

PMC 3 LIMITED - Analysis Report

Company Number: SC679203

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

1. Risk Rating: HIGH
   Justification: PMC 3 Limited shows persistent negative net current assets over multiple years, indicating ongoing liquidity challenges. Current liabilities substantially exceed cash and other current assets, and the company relies heavily on director loans, raising concerns about its ability to meet short-term obligations without continued director support.

2. Key Concerns:

• Liquidity Deficit: Net current liabilities stand at approximately £24,443 as of 31 March 2024, with only £4 in cash, signaling acute short-term funding pressure.
• Dependence on Director Loans: The company’s borrowings are entirely classified as director current account loans (£23,697), which may not be sustainable or enforceable as stable financing.
• Operating Losses and Asset Write-down: The carrying amount of tangible fixed assets declined from £38,839 in 2023 to £33,984 in 2024 due to depreciation, with no corresponding increase in cash or current assets, suggesting limited operational cash generation and possible ongoing losses (profit and loss accounts were not filed).

3. Positive Indicators:

• Compliance with Filing Requirements: The company is up to date with both accounts and confirmation statement filings, indicating regulatory compliance and governance diligence.
• Going Concern Assertion: Directors have prepared accounts on a going concern basis, implying they believe the company can continue operations despite financial challenges.
• Stable Shareholders’ Funds: Though small in amount (£6,209), shareholders’ funds remain positive, reflecting some retained equity buffer.

4. Due Diligence Notes:

• Investigate the nature and terms of director loans to assess their permanence and risk of withdrawal.
• Review management accounts and cash flow forecasts to evaluate operational cash generation and plans to address liquidity shortfalls.
• Obtain profit and loss details, as these are not publicly filed, to understand the company’s profitability and loss trends.
• Assess any contingent liabilities or off-balance sheet risks not disclosed in the filings.
• Confirm the status of tangible assets for impairment beyond depreciation and their role in generating revenue.