RED LINE FOUNDRY LTD

Executive Summary

Red Line Foundry Ltd demonstrates a generally stable financial position with positive net assets and liquidity, and no regulatory compliance issues. However, the recent decline in net assets and cash reserves combined with its small scale and concentrated ownership pose moderate operational and governance risks. Further due diligence on profitability trends and business sustainability is recommended to fully assess investment suitability.

RED LINE FOUNDRY LTD - Analysis Report

Company Number: 14074697

Analysis Date: 2025-07-29 16:59 UTC

1. Risk Rating: LOW to MEDIUM
   Red Line Foundry Ltd shows a solid equity base and positive net current assets, indicating solvency and liquidity on the surface. However, as a recently incorporated company (2022) in the management consultancy sector with limited operating history and small scale (2 employees), some operational risks remain. No overdue filings or liquidation issues reduce compliance concerns.

2. Key Concerns:

• Declining Net Assets: Net assets decreased from £78,974 (2023) to £65,265 (2024), signaling possible profit erosion or asset depreciation that warrants monitoring.
• Decrease in Cash Reserves: Cash dropped from £32,361 to £19,902 within the year, which could pressure liquidity if not managed carefully.
• Concentrated Control and Key Person Risk: Both directors, who are also significant shareholders, have full control. This presents governance risks and potential vulnerability if either departs.

3. Positive Indicators:

• Positive Net Current Assets: £18,588 at 2024 year-end suggests ability to cover short-term liabilities comfortably.
• No Overdue Filings or Regulatory Issues: Company remains compliant with accounts and confirmation statement deadlines.
• Tangible Fixed Assets: The company holds tangible assets (£46,677 net) providing some balance sheet stability.

4. Due Diligence Notes:

• Investigate the causes of net asset decline and cash reduction—review profit and loss trends and cash flow statements if available.
• Assess contractual client base and revenue streams to gauge operational sustainability and growth prospects.
• Review director backgrounds and governance structure to understand any potential related-party transactions or conflicts.
• Confirm absence of contingent liabilities or off-balance sheet risks not evident in the financial snapshot.