Company Number: 13017998

Analysis Date: 2025-07-20 13:30 UTC

1. Risk Rating: HIGH

   Justification: The company’s most recent financial data as of November 2024 shows a drastic reduction in current assets from £38,601 in 2023 to £176 in 2024, while current liabilities remain substantial at £8,582. This creates a net current asset position that appears inconsistent (£2,712 reported) and suggests possible reporting or classification issues. The total net assets have declined sharply from £37,013 in 2023 to £3,015 in 2024, indicating a sudden and significant deterioration in financial strength and liquidity. Such a decline within a single year in a micro-entity is a substantial red flag for solvency and liquidity concerns.

2. Key Concerns:

   • Liquidity Crisis: Current assets dropped precipitously by over 99% year-on-year, potentially indicating cash flow problems or asset write-downs.
   • Solvency Decline: Net assets have fallen more than 90%, signaling erosion of shareholder funds and possible inability to meet obligations.
   • Financial Statement Anomalies: The reported net current assets (£2,712) do not reconcile with the reported current assets and liabilities (£176 and £8,582 respectively), suggesting possible errors or unusual accounting treatment that needs clarification.

3. Positive Indicators:

   • Compliance and Timeliness: The company is up to date with its accounts and confirmation statement filings, mitigating regulatory risk.
   • Stable Governance: Directors have been in place since incorporation with no evidence of disqualifications or governance issues.
   • Micro Entity Filing: Being a micro-entity reduces complexity and audit burden, which can be advantageous for small-scale operations.

4. Due Diligence Notes:

   • Investigate the cause of the drastic reduction in current assets from 2023 to 2024, including any write-offs, asset disposals, or reclassification.
   • Verify the accuracy of reported net current assets and reconcile balance sheet line items for consistency.
   • Assess the company’s cash flow statements (if available) and short-term obligations to evaluate immediate liquidity risk.
   • Request management commentary or notes explaining the sharp decline in net assets and operational impacts.
   • Confirm whether there are any contingent liabilities or off-balance sheet commitments not disclosed.
   • Review the business model and recent trading performance to understand sustainability prospects given the financial deterioration.