S R A C LTD

Executive Summary

S R A C LTD is a small, active roofing company with positive net assets but experiencing a working capital deficit due to a significant increase in current liabilities. While compliance with statutory filings is up to date and asset growth is evident, the liquidity strain and limited operational scale warrant further scrutiny. Investors should closely review the nature of short-term liabilities and the company’s revenue generation to assess ongoing financial stability.

S R A C LTD - Analysis Report

Company Number: 13267779

Analysis Date: 2025-07-20 17:48 UTC

1. Risk Rating: MEDIUM
   The company shows modest net assets and a recent negative working capital position, indicating some liquidity strain. However, it remains solvent with positive net assets and no overdue filings, which mitigates immediate solvency concerns.

2. Key Concerns:

• Negative Net Current Assets (Working Capital Deficit): As of 31 March 2023, current liabilities (£63,973) exceed current assets (£59,327) by £4,646, potentially signaling short-term liquidity issues.
• Rapid Increase in Current Liabilities: Current liabilities jumped substantially from £2,730 in 2022 to £63,973 in 2023 without a corresponding increase in current assets, warranting investigation into the nature of these liabilities.
• Limited Operational Scale and Employee Base: The company has only one employee (the director) and minimal share capital (£100), which may restrict operational capacity and financial resilience.

3. Positive Indicators:

• Positive Net Assets and Shareholders’ Funds: Net assets increased from £10,150 in 2022 to £12,956 in 2023, indicating retained equity and solvency at the balance sheet date.
• Current Filing Status and Compliance: No overdue accounts or confirmation statements reported, reflecting good compliance and governance practices.
• Growth in Fixed and Current Assets: Fixed assets increased notably, suggesting some investment in operational capacity or equipment.

4. Due Diligence Notes:

• Nature and Terms of Current Liabilities: Clarify the composition and maturity profile of the £63,973 current liabilities to assess liquidity risk and potential refinancing needs.
• Revenue and Profitability Trends: Obtain P&L information to understand income generation and whether asset growth is supported by sustainable earnings.
• Director’s Financial Support: Investigate if the director or related parties have provided short-term financing or if liabilities include intercompany or director loans.
• Business Model and Market Position: Understand the company’s roofing activities, client base, and competitive positioning to evaluate operational sustainability.
• Audit Exemption Implications: Recognize that accounts are unaudited under micro-entity provisions, increasing reliance on director-provided information.