ROCKS OYSTERS LIMITED

Executive Summary

Rocks Oysters Limited is currently operational and compliant with statutory requirements but shows signs of liquidity stress with negative net current assets and a sharp drop in net equity. While ongoing trade receivables and tangible assets support operational continuity, the company’s financial position warrants close monitoring of cash flow and debtor quality. Further analysis of profitability and working capital management is recommended to assess sustainability risks.

ROCKS OYSTERS LIMITED - Analysis Report

Company Number: 13041367

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

1. Risk Rating: MEDIUM
   The company exhibits some financial strain indicated by negative net current assets in the latest year and a significant decline in net assets compared to prior years. However, it remains active, compliant with filings, and shows ongoing operations with tangible assets and trade receivables. These factors suggest moderate risk rather than immediate distress.

2. Key Concerns:

• Liquidity Pressure: Negative net current assets (£-1,121) at 2024 year-end, driven by current liabilities (£75,629) exceeding current assets (£74,508), signals potential short-term cash flow challenges.
• Declining Net Assets: Net assets have decreased sharply from £14,867 in 2023 to £101 in 2024, indicating erosion of equity which could impair solvency if the trend continues.
• High Trade Creditors Relative to Cash: Trade creditors increased from £44,876 to £53,815 while cash reserves remain low and stable (~£7,485), raising concerns about the company’s ability to settle supplier obligations promptly.

3. Positive Indicators:

• Compliance and Governance: The company is active, up to date with accounts and confirmation statement filings, and has no overdue obligations.
• Ongoing Operations: Presence of tangible assets (£1,222) and consistent stock levels (~£6,500) demonstrate continued business activity.
• Reasonable Debtor Balances: Trade debtors remain sizeable (£53,636), indicating ongoing sales and potential liquidity if collections are timely.

4. Due Diligence Notes:

• Review Debtor Quality: Investigate the aging profile and collectability of trade debtors given their scale relative to cash and liabilities.
• Examine Causes of Equity Decline: Understand underlying reasons for sharp net asset reduction, including profitability, asset impairments, or increased liabilities.
• Assess Cash Flow Projections: Request management cash flow forecasts to evaluate the company’s ability to meet short-term obligations and sustain operations.
• Director Background and Control: Note that Mr. Simon Lamont controls significant shareholding and holds directorial responsibility; review any related party transactions (£1,909 owed) for potential conflicts or risks.