Company Number: 13888241

Analysis Date: 2025-07-20 16:49 UTC

1. Risk Rating: HIGH
   The company shows negative net assets (£-6,241) and significant net current liabilities (£-60,402) as of the latest accounts date (28 February 2024). The presence of bank loans (£124,020) and director’s loans (over £111,000) coupled with low cash (£3,926) raises immediate solvency and liquidity concerns, indicating challenges in meeting short-term obligations.

2. Key Concerns:

• Solvency Risk: Negative shareholders’ funds and net assets reflect the company is technically insolvent on a balance sheet basis. The total liabilities exceed total assets.
• Liquidity Issues: Current liabilities significantly exceed current assets, with very limited cash available, suggesting potential cash flow stress to cover immediate debts.
• Leverage and Related Party Debt: Large bank loans and director’s loan accounts imply high leverage and reliance on related party financing, which may not be sustainable or easily repayable.

3. Positive Indicators:

• Active Status and Compliance: The company is active and up to date with both accounts and confirmation statement filings, indicating good regulatory compliance and operational continuity.
• Investment Property Asset: The company holds investment properties valued at £178,181, which could provide collateral value or income generation potential.
• Single Experienced Director and Majority Control: The sole director and 100% shareholder is consistent, reducing governance complexity and potentially allowing swift decision-making.

4. Due Diligence Notes:

• Investigate the nature and terms of the bank loan and director’s loan, including repayment schedules and interest rates, to assess financial burden and refinancing risk.
• Review cash flow statements and management forecasts (not provided) to understand operational cash generation and ability to meet short-term liabilities.
• Examine the valuation method and marketability of the investment properties to validate asset values and potential liquidity if asset sales were required.
• Confirm absence of any contingent liabilities or off-balance sheet obligations that could further affect solvency.
• Assess the business model sustainability given the company’s recent incorporation (2022) and current financial distress indicators.