RSVP ONLINE LTD
Executive Summary
RSVP Online Ltd has demonstrated a recovery from prior years’ losses to a modestly positive financial position in the latest year, reflecting improved operational results. Despite this, the company remains small with limited capital and some reliance on director financing, which could impact sustainability. Overall, the company appears compliant and improving, but investors should scrutinize underlying cash flow and director financing arrangements to confirm ongoing stability.
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This analysis is opinion only and should not be interpreted as financial advice.
RSVP ONLINE LTD - Analysis Report
Risk Rating: MEDIUM
RSVP Online Ltd shows a marked improvement in financial position in the latest year, moving from negative net current assets and shareholders’ funds to a positive position. However, the absolute values remain relatively small, and the company operates with minimal capital (£1 share capital) and low cash reserves. The prior years’ losses indicate some historical financial instability.Key Concerns:
- Historical negative net current assets and shareholders’ funds for two consecutive years (2022 and 2023) indicate past solvency challenges.
- Small scale of operations with only 2 employees and limited financial resources may constrain operational resilience and growth potential.
- Significant amounts owed to directors’ current accounts (£12,458) could indicate reliance on director financing, which may not be sustainable long-term.
- Positive Indicators:
- The latest financial year (ending 30 April 2024) shows a turnaround with net current assets of £3,678 and positive retained earnings, suggesting recent profitability (£12,134 profit for the year).
- Timely filing of accounts and confirmation statement with no overdue status indicates regulatory compliance and good governance practices.
- The company is classified as a small entity with exemption from audit, simplifying compliance burden and indicating scale appropriate to current operations.
- Due Diligence Notes:
- Investigate the nature and sustainability of the recent profit and the business model supporting it, including client contracts and revenue streams.
- Review the director’s current account arrangements and whether these represent loans or unpaid remuneration, assessing any repayment plans or risks.
- Examine cash flow trends in detail to ensure liquidity is sufficient to meet short-term obligations given the relatively tight net current asset position.
- Confirm no outstanding regulatory or tax issues beyond those disclosed in creditors (noting tax creditor of £2,148 and VAT creditor of £10,804).
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