Company Number: 13802613

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

1. Risk Rating: MEDIUM
   The company's financials show a sharp deterioration in net current assets from a positive £5,709 in 2022 to a negative £5,652 in 2023, indicating liquidity stress. While the company remains active and compliant with filings, the working capital deficit and reduction in shareholders’ funds to a nominal £160 raise moderate concerns about short-term solvency. However, no indications of insolvency or regulatory non-compliance are evident.

2. Key Concerns:

• Liquidity Position: Net current liabilities of £5,652 at year-end 2023 suggest the company may struggle to meet immediate obligations without additional financing.
• Declining Shareholders’ Funds: A drop from £10,209 in 2022 to £160 in 2023 implies losses or withdrawals that have eroded the equity base, potentially weakening financial stability.
• Director Loan and Dividend Payments: An unsecured, interest-free director loan of £16,134 remains on the books, alongside dividends paid (£14,000 in 2023), which may strain cash flow and raise governance questions regarding the balance between shareholder distributions and operational needs.

3. Positive Indicators:

• Timely Filings and Compliance: All statutory accounts and confirmation statements are up to date with no overdue filings, indicating good regulatory compliance.
• Ownership and Control Transparency: Clear identification of a single controlling director and shareholder with no reported disqualifications or governance issues.
• Established Accounting Policies: Use of standard accounting practices consistent with small company reporting gives reliability to disclosed figures.

4. Due Diligence Notes:

• Review profit and loss details to understand drivers behind the significant erosion of equity and current liabilities increase in 2023.
• Assess the nature and recoverability of director loans and the rationale for dividend payments given the liquidity position.
• Evaluate cash flow forecasts and arrangements for short-term financing or creditor negotiations to address working capital deficit.
• Verify if any off-balance-sheet liabilities or contingent liabilities exist that could exacerbate financial risk.
• Confirm ongoing operational viability given the small asset base and single employee structure.