Company Number: 13971847

Analysis Date: 2025-07-29 19:36 UTC

1. Risk Rating: MEDIUM
   The company shows positive net current assets and increasing shareholders’ funds, indicating some solvency. However, the relatively low cash balance compared to current liabilities, significant director’s loan account, and limited financial history warrant caution.

2. Key Concerns:

• Liquidity Risk: Cash at bank (£25,626) is substantially lower than current liabilities (£84,677), implying reliance on debtor collections and potential cash flow constraints.
• Director’s Loan Exposure: A significant amount (£89,803) is advanced by the director, indicating reliance on related-party funding, which may be withdrawn or impact operational cash flow.
• Limited Operational History and Scale: Incorporated in 2022, with only one employee and small asset base, the company’s operational sustainability and market position are not yet proven.

3. Positive Indicators:

• Improved Working Capital Position: Net current assets increased from £10,004 (2023) to £71,981 (2024), reflecting better short-term financial health.
• No Overdue Filings: Both accounts and confirmation statements are filed on time, suggesting good compliance and governance practices.
• Shareholder Equity Growth: Shareholders’ funds grew significantly to £74,404, indicating retained earnings accumulation or capital infusion.

4. Due Diligence Notes:

• Review the nature and collectability of the large debtor balance (£131,032), especially the £121,912 classified as “other debtors,” to assess potential liquidity risks.
• Investigate the terms and security (if any) around the director’s loan to understand risk exposure and repayment likelihood.
• Obtain further information on revenue streams, profitability, and business model given the absence of an income statement and limited employee count.
• Confirm no director disqualifications or regulatory issues associated with key personnel.
• Monitor future cash flow trends and working capital management, given the low cash reserves relative to liabilities.