QUARTER HOUSE COFFEE LTD

Executive Summary

Quarter House Coffee Ltd is a newly formed micro-entity operating in the café sector with compliant filings and engaged directors. However, the company’s negative working capital and minimal equity base present liquidity and solvency concerns typical for a start-up. Further due diligence on cash flows and operational viability is recommended to assess investment risk adequately.

QUARTER HOUSE COFFEE LTD - Analysis Report

Company Number: NI693668

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

1. Risk Rating: MEDIUM
   The company is newly incorporated (January 2023) and operates as a micro-entity in the unlicensed café sector. Its balance sheet shows net current liabilities and very low working capital, indicating potential liquidity challenges despite being operational and compliant with filings.

2. Key Concerns:

• Liquidity Risk: Current assets (£3,263) are significantly lower than current liabilities (£28,801), resulting in negative net working capital which may impair the company’s ability to meet short-term obligations.
• Limited Operating History: With less than two years since incorporation, there is limited financial and operational track record to assess sustainability or profitability.
• Thin Equity Base: Shareholders’ funds stand at a low £3,485, suggesting limited capital buffer to absorb losses or finance growth.

3. Positive Indicators:

• Compliance: No overdue filings for accounts or confirmation statements, reflecting good governance and regulatory adherence.
• Directors’ Involvement: Both directors are local and appear actively involved, which may contribute to effective management oversight.
• Micro-Entity Reporting: Simplified accounts reduce complexity and costs, appropriate for the company’s size and stage.

4. Due Diligence Notes:

• Investigate cash flow statements or management accounts to clarify liquidity and operational cash generation beyond balance sheet data.
• Assess the business model viability and revenue streams given the small asset base and industry sector risks.
• Confirm any contingent liabilities or related party transactions not visible in micro-entity accounts.
• Review plans for capital injection or debt servicing to address working capital shortfall.
• Verify absence of director disqualifications or legal disputes that may affect governance.