Company Number: 12927441

Analysis Date: 2025-07-29 12:51 UTC

1. Risk Rating: HIGH
   The company shows persistent negative net current assets with increasing current liabilities, indicating solvency and liquidity concerns. The net assets have declined significantly in the latest year, compounded by a substantial director loan balance. These factors raise red flags about the company’s ability to meet short-term obligations and sustain operations without additional funding.

2. Key Concerns:

• Negative Working Capital: Net current liabilities worsened from £211 (2022) to £2,014 (2023), driven by a sharp rise in current liabilities (£1,427 to £3,173), indicating cash flow strain.
• Director Loans: Loans from directors increased dramatically to £2,798 in 2023, suggesting reliance on director financing to maintain operations, which may not be sustainable or guaranteed.
• Declining Net Assets: Net assets decreased from £2,057 in 2022 to £705 in 2023, reflecting erosion of equity and potential financial instability.

3. Positive Indicators:

• Active Status and Timely Filing: The company is active with no overdue filings or accounts, indicating compliance with regulatory requirements.
• Fixed Assets Growth: Tangible fixed assets increased to £3,356 (2023) from £2,268 (2022), showing investment in operational capacity.
• Consistent Director: A single director with stable appointment since incorporation may contribute to operational continuity.

4. Due Diligence Notes:

• Investigate the nature and terms of director loans, including repayment plans and whether these loans are formalized.
• Review cash flow forecasts and funding plans to assess ability to cover working capital deficits and current liabilities.
• Clarify the impact of deferred tax provisions (£637) on future cash flows and profitability.
• Examine revenue trends and profitability metrics, which are not provided, to understand operational viability.
• Assess the risk of potential creditor actions due to increasing short-term liabilities.