Company Number: 12856987

Analysis Date: 2025-07-29 18:36 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns, reflected in persistent negative net current assets and shareholders’ funds over multiple years. Despite growing turnover and reported profits, the absence of current assets and ongoing liabilities suggest financial distress.

2. Key Concerns:

• Negative Net Current Assets: The balance sheet shows a consistent shortfall in current assets versus current liabilities (£-7,385 in 2024), indicating inability to meet short-term obligations from available liquid resources.
• Zero Reported Current Assets & Cash: The financial statements repeatedly report zero cash or other current assets, which raises concerns about actual liquidity and operational cash flow.
• Negative Shareholders’ Funds and Net Assets: The company’s equity position is negative and worsening (from £-3,001 in 2020 to £-7,385 in 2024), suggesting accumulated losses or undercapitalization that threaten financial sustainability.

3. Positive Indicators:

• Increasing Turnover and Profit: The company’s revenue has grown from £52,400 in 2021 to £128,534 in 2024, with a reported profit of £41,638 in the latest period, indicating improving operational performance.
• No Overdue Filings: All accounts and confirmation statements are up to date with Companies House, showing compliance with regulatory deadlines.
• No Audit Exemption Utilized: The company has not required an audit, consistent with its micro-entity status, simplifying compliance burden.

4. Due Diligence Notes:

• Clarify Cash Flow and Working Capital Management: Investigate why current assets and cash are reported as zero despite positive turnover and profits. Review bank statements and working capital cycles.
• Examine Nature of Current Liabilities: Understand the composition and maturity profile of creditors (£7,385) to assess urgency of obligations and risk of default.
• Assess Director Stability and Governance: The recent resignation of director Shannon Thomas and the small size of the company (average 1 employee) may impact operational continuity. Confirm current management strength and controls.
• Review Profit Recognition Practices: Confirm that income and cost recognition conform to accounting standards, especially as profitability is reported alongside negative equity.
• Investigate Capital Structure and Funding Sources: Determine if the company has access to additional financing or shareholder support to address negative net assets.

Executive Summary:
RLOCK ENTERPRISE LTD is an active micro-entity operating in online retail with increasing turnover and reported profits. However, persistent negative net current assets, zero reported cash balances, and negative shareholders’ funds indicate significant solvency and liquidity risks. While regulatory compliance is current, further investigation into cash flow management and liability structure is essential to assess the company’s financial stability and operational sustainability.