Company Number: 13176175

Analysis Date: 2025-07-29 19:21 UTC

1. Risk Rating: MEDIUM

Justification: SPROWTED LTD shows improving financial metrics over a short operating history since incorporation in 2021, transitioning from negative net assets to positive shareholders' funds of £27,072 as of 2025. However, current liabilities have increased significantly in the latest year, raising liquidity concerns. The absence of employees and reliance on a single director may pose operational risks.

2. Key Concerns:

• Liquidity Pressure: Current liabilities jumped from £10,311 in 2024 to £36,038 in 2025 while current assets increased less proportionally, resulting in a negative net working capital position in 2025 (current assets minus current liabilities = £62,167 - £36,038 = £26,129, which is positive but the large increase in short-term liabilities warrants monitoring).
• Operational Scale: The company reports zero employees and is run solely by one director, potentially limiting scalability and operational resilience.
• Limited Financial Depth: As a micro-entity, the accounts are unaudited with minimal disclosure, restricting comprehensive assessment of financial stability and risks.

3. Positive Indicators:

• Improving Net Assets: Shareholders’ funds have increased steadily from a negative £19,027 at incorporation to £27,072 in 2025, indicating strengthening equity.
• Compliance: All filings, including accounts and confirmation statements, are up to date with no overdue status, reflecting good regulatory compliance.
• Industry Sector: Operating in advertising agencies (SIC 73110) which typically requires low fixed assets investment and may have flexible cost structures.

4. Due Diligence Notes:

• Investigate reasons behind the substantial increase in current liabilities in the 2025 financial year to assess if this reflects increased trade payables, short-term borrowings, or other obligations.
• Clarify the nature of current assets (cash vs receivables or stock) to evaluate liquidity quality.
• Review management plans for operational growth given zero staff and sole directorship.
• Confirm absence of director disqualifications or governance issues beyond provided data.
• Consider requesting more detailed financial information or management accounts for ongoing risk monitoring.