STEVEN MCFARLANE DESIGN LTD

Executive Summary

STEVEN MCFARLANE DESIGN LTD is currently solvent but shows signs of financial stress with declining liquidity and equity over the last year. While regulatory compliance is maintained, close scrutiny of provisions and operational cash flow is advisable to assess ongoing viability. Investors should seek further financial details to clarify the causes behind the recent deterioration in financial position.

STEVEN MCFARLANE DESIGN LTD - Analysis Report

Company Number: SC685423

Analysis Date: 2025-07-29 20:06 UTC

1. Risk Rating: MEDIUM
   The company shows a material decline in both current assets and shareholders' funds in the latest financial year, alongside a significant increase in provisions for liabilities. While it remains solvent on paper, these trends warrant caution regarding its near-term financial stability.

2. Key Concerns:

• Declining Liquidity: Current assets dropped sharply from £36k in 2023 to under £8k in 2024, while current liabilities remain above £5k, indicating tightening working capital.
• Increased Provisions for Liabilities: Provisions rose from £7,111 in 2023 to £212 in 2024, which may suggest resolution of prior obligations but requires clarification; the prior high provisions also suggest potential past contingent liabilities.
• Shrinking Shareholders’ Funds: Equity fell from £10,377 to £2,848, reflecting accumulated losses or withdrawals reducing the company’s net worth, which may impact solvency if the trend continues.

3. Positive Indicators:

• Compliance: No overdue filings and accounts are up to date, showing good regulatory compliance.
• No Employees: The absence of employees reduces operational overhead and associated risks.
• Director Stability: Single director with continuous appointment since incorporation, potentially indicating stable management.

4. Due Diligence Notes:

• Investigate the nature and resolution of the provisions for liabilities, including what caused the large provisions in 2023 and the significant decrease in 2024.
• Review cash flow statements or bank balances to understand liquidity pressures given the sharp current asset decline.
• Obtain profit and loss information for recent years to assess operational performance and causes of equity erosion.
• Confirm the scope and sustainability of business activities given the micro-entity status and low asset base.
• Explore any related party transactions or director loans that might affect financial stability.