SHAHZADI FASHION LTD

Executive Summary

SHAHZADI FASHION LTD is a recently incorporated micro-entity operating in retail with modest net assets and a negative working capital position, indicating some liquidity concerns. Despite compliance with filings and signs of growth, the limited financial history and concentrated ownership warrant careful due diligence on cash flow and operational viability. Overall, the company presents medium risk from a solvency and liquidity standpoint at this early stage of its development.

SHAHZADI FASHION LTD - Analysis Report

Company Number: 14502123

Analysis Date: 2025-07-29 12:33 UTC

1. Risk Rating: MEDIUM
   The company shows modest net assets and shareholders' funds with a slight increase year on year. However, the presence of current liabilities exceeding current assets and a negative net current asset position signals potential liquidity risks. The company is very young (incorporated late 2022) and classified as a micro-entity, which limits available financial detail.

2. Key Concerns:

• Liquidity Position: Current assets (£38,817) are less than current liabilities (£45,499) at latest year-end, resulting in a negative net current assets figure (–£6,682). This could indicate cash flow difficulties in meeting short-term obligations.
• Small Scale and Limited Financial History: Being a micro-entity with just over two years of operation restricts trend analysis and assessment of financial stability over time.
• Concentration of Control: One individual holds 75-100% of shares and voting rights, which may increase governance risk due to lack of board diversity.

3. Positive Indicators:

• Improving Net Assets: Net assets increased from £1,297 in 2023 to £3,548 in 2024, showing some improvement in equity base.
• Compliance with Filing: Accounts and confirmation statements are up to date with no overdue filings, indicating regulatory compliance.
• Growth in Employees: Increase in average employees from 1 to 3 suggests some operational expansion.

4. Due Diligence Notes:

• Verify cash flow statements and bank balances to assess actual liquidity position and working capital management.
• Review trade creditor terms and payment practices to understand the nature of current liabilities and any potential pressure from suppliers.
• Assess business plan and revenue projections to evaluate sustainability of growth given the small asset base and limited history.
• Consider director background and related party transactions due to concentrated ownership and control.
• Confirm whether any off-balance sheet liabilities or contingent risks exist that may impact solvency.