Company Number: NI694727

Analysis Date: 2025-07-29 12:27 UTC

1. Risk Rating: MEDIUM
   The company shows a positive net asset position but a notable decline in net assets and increased long-term liabilities from the prior year. The presence of a directors' loan with no repayment terms and reduced cash reserves highlight potential liquidity risks.

2. Key Concerns:

• Liquidity Pressure: Cash at bank has decreased significantly from £20,080 to £6,577, while current liabilities remain high, indicating potential cash flow constraints.
• Increased Long-Term Debt: Creditors due after one year have halved but still stand at £19,552, including a sizeable director’s loan (£6,970) with no repayment schedule or interest, which may pose refinancing risk.
• Declining Net Assets: Net assets decreased from £2,984 to £2,099 year-on-year, suggesting erosion of equity that may impact solvency if the trend continues.

3. Positive Indicators:

• Positive Net Current Assets: The company maintains positive net current assets (£4,278) as of the latest year-end, indicating short-term solvency.
• No Filing or Compliance Issues: All statutory accounts and confirmation statements are filed on time with no overdue filings reported.
• Experienced Director and Control Structure: Single director with engineering background and full ownership control facilitates clear decision-making and oversight.

4. Due Diligence Notes:

• Investigate the nature, terms, and repayment prospects of the director’s loan of £6,970 and other long-term creditors to assess refinancing or default risk.
• Review cash flow forecasts and working capital management given the sharp decline in cash reserves over the year.
• Obtain details on turnover, profitability, and operational performance, which are not disclosed in the filed accounts, to better understand business sustainability.
• Confirm whether the company’s depreciation policies and asset valuations reflect true economic conditions, given the significant fixed asset base under hire purchase.
• Verify any contingent liabilities or off-balance sheet commitments which could impact financial stability.