Company Number: 14402361

Analysis Date: 2025-07-20 11:15 UTC

1. Risk Rating: HIGH
   Justification: The company shows a significant deterioration in net current assets from a positive £11,155 in 2023 to a negative £8,015 in 2024, indicating liquidity stress. Additionally, the presence of long-term creditors (£8,369) and a sharp decline in net assets (£19,558 to £5,332) signal solvency risk.

2. Key Concerns:

   • Liquidity Deficit: Negative net current assets in 2024 suggest the company may struggle to meet short-term obligations as current liabilities exceed current assets.
   • Increased Debt Burden: Introduction of long-term liabilities (£8,369) not present in previous year may indicate reliance on external financing or delayed payments, raising financial risk.
   • Erosion of Equity: A substantial reduction in shareholders’ funds from £19,558 to £5,332 within one year suggests either losses or significant distributions, weakening the capital base.

3. Positive Indicators:

   • The company remains active and compliant with all filing deadlines, reflecting good governance practices.
   • Fixed assets have increased, indicating investment in operational capacity or equipment which may support future revenue.
   • The director, who is also the sole significant controller, appears stable and engaged, with direct operational experience as an electrician.

4. Due Diligence Notes:

   • Investigate the nature and terms of the long-term creditors introduced in the latest accounts to assess repayment risk and covenant obligations.
   • Review profit and loss details or management accounts (not provided) to understand causes of equity erosion and cash flow trends.
   • Assess whether the liquidity issues are temporary (e.g., timing of receivables/payables) or structural.
   • Verify any contingent liabilities or off-balance-sheet commitments that may exacerbate financial risk.
   • Confirm the accuracy of fixed asset valuations and whether these assets are efficiently deployed to generate revenue.