Company Number: 13799930

Analysis Date: 2025-07-29 20:25 UTC

1. Risk Rating: HIGH

The company's financial statements reveal significant solvency and liquidity concerns, with persistent and increasing net current liabilities and negative shareholders' funds over multiple years. The inability to cover short-term liabilities with current assets, coupled with a substantial deficit in equity, indicates high financial distress risk.

2. Key Concerns:

• Severe Negative Net Current Assets: The company has net current liabilities of approximately £21,305 as of 31 December 2023, which represents an inability to meet short-term obligations from liquid assets. This situation has worsened slightly compared to previous years.

• Consistent Net Liabilities and Shareholder Deficit: The net assets are deeply negative (£-15,432 in 2023), and shareholders’ funds are similarly in deficit, indicating accumulated losses and a weak capital base that undermines financial stability.

• Director Loans and Advances: The director B M Eriksson has a substantial outstanding balance owed to the company (~£21,608), which appears to be a credit balance rather than a loan from the company, but the nature and recoverability of these balances require scrutiny. Reliance on director advances or credits can indicate funding challenges.

3. Positive Indicators:

• Timely Filing and Compliance: The company is active with no overdue filings for accounts or confirmation statements, showing compliance with regulatory requirements.

• Stable Management and Control: The directors and significant controllers have maintained consistent roles since incorporation, suggesting operational continuity.

• Small Scale Operations: Being a small private company operating in the food services sector with only 2 employees may imply a lean cost structure, which might be beneficial if business conditions improve.

4. Due Diligence Notes:

• Clarify Nature of Director Balances: Investigate the director advances/credits account, its classification, and whether it represents financial support, loans, or other arrangements, including any repayment plans.

• Cash Flow Analysis and Forecasts: Obtain cash flow statements or management forecasts to assess liquidity management, ability to service debts, and plans to restore solvency.

• Business Model Viability: Explore the operational sustainability of the catering business, including revenue streams, client base, and growth prospects, to understand if losses are temporary or structural.

• External Funding and Support: Determine if there are external investors, loans, or guarantees that might support the company’s financial position beyond the balance sheet.

• Audit and Verification: Note that accounts are unaudited filleted accounts; consider requesting audited financials or further assurances on the accuracy of reported figures.

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