RIO TWO LIMITED

Executive Summary

RIO TWO LIMITED faces significant liquidity and solvency risks, evidenced by sustained negative working capital and minimal cash balances. While the company complies with regulatory filings and shows some asset investment, its very low equity base and cash constraints suggest potential financial instability. Further examination of operational cash flows and creditor terms is recommended to assess ongoing viability.

RIO TWO LIMITED - Analysis Report

Company Number: 13659367

Analysis Date: 2025-07-20 18:49 UTC

1. Risk Rating: HIGH
   The company exhibits a high risk profile due to persistent negative net current assets, very limited cash reserves, and minimal net equity, indicating potential solvency and liquidity challenges.

2. Key Concerns:

• Negative Working Capital: The company’s net current liabilities increased to £3,013 as of 31 October 2023, worsening from £2,388 the prior year, which signals ongoing liquidity stress and challenges meeting short-term obligations.
• Minimal Cash Holdings: Cash at bank dropped sharply from £1,144 in 2022 to only £76 in 2023, raising concerns about the company’s ability to cover immediate expenses and operational costs.
• Very Low Equity Base: Shareholders’ funds remain nominal at £100 throughout the period, suggesting limited financial buffer to absorb losses or invest in growth.

3. Positive Indicators:

• Consistent Filing Compliance: The company is up to date with its filing obligations, including accounts and confirmation statements, which reflects regulatory compliance and governance diligence.
• Growth in Tangible Assets: Net fixed assets increased from £2,488 to £3,113, indicating some investment in long-term operational capacity.
• Stable Director and PSC Structure: The company has a stable director and two identified persons with significant control, which may facilitate clear decision-making.

4. Due Diligence Notes:

• Investigate the company’s cash flow generation and sources of working capital given the low cash reserves and negative net current assets.
• Review the nature of current liabilities to assess any concentration risk or overdue creditor payments.
• Understand the business model and revenue streams, as financial data alone offers limited insight into operational sustainability.
• Examine the depreciation policy and asset utilization to confirm the tangible asset values are appropriate and productive.
• Verify that there are no contingent liabilities or off-balance sheet obligations not disclosed in the accounts.