Company Number: SC679631

Analysis Date: 2025-07-29 20:34 UTC

1. Risk Rating: HIGH
   The company exhibits a high risk profile due to significant current liabilities far exceeding current assets leading to negative net current assets, indicating potential liquidity difficulties. The very large creditor balance relative to cash on hand signals solvency concerns.

2. Key Concerns:

• Liquidity Deficit: Current assets (£1,813) are drastically lower than current liabilities (£534,887) as of November 2023, resulting in negative net current assets (-£1,911). This suggests potential cash flow constraints to meet short-term obligations.
• Heavy Long-Term Debt: Creditors falling due after more than one year total £534,887, indicating substantial long-term liabilities that could strain financial flexibility.
• Loss Reserves and Negative Profit & Loss Account: Despite a positive revaluation reserve, the company has accumulated losses reflected in a negative profit and loss reserve (-£6,766), which may reflect operational losses or impairments.

3. Positive Indicators:

• Asset Base Growth: Tangible fixed assets increased significantly from £353,702 in 2022 to £561,616 in 2023, supported by property revaluation gains of £30,897, indicating potential growth in underlying asset values.
• Shareholders’ Funds Turnaround: The net assets improved from a negative position in previous years (-£3,927 in 2022) to a positive £24,231 in 2023, primarily due to revaluation reserve recognition.
• Compliance with Filing Deadlines: The company is up to date with its accounts and confirmation statement filings, with no overdue returns, indicating regulatory compliance and administrative discipline.

4. Due Diligence Notes:

• Investigate the nature and terms of the substantial creditors, both short and long-term, to assess repayment schedules and any covenant risks.
• Review the company’s cash flow forecasts and working capital management to understand how the liquidity gap is being managed operationally.
• Examine the impact of the revaluation reserve on asset quality and whether it is realizable or merely accounting adjustment.
• Confirm the absence of contingent liabilities or off-balance-sheet obligations that could exacerbate solvency risk.
• Assess the director loan (£178,126 interest-free) for its terms and whether it is a sustainable financing source or a temporary measure.
• Verify the operational model and revenue streams given no employees reported and limited turnover data available.