Company Number: 13114930

Analysis Date: 2025-07-19 12:54 UTC

1. Risk Rating: LOW

Justification: Studio 306 Ltd demonstrates improving financial health with positive net current assets and shareholders’ funds growth in the latest financial year. The company is current on all statutory filings, and there are no indications of insolvency or governance issues from the available data.

2. Key Concerns:

• Director’s Loans: The director, Ms B Sime, has a significant outstanding loan balance of £26,412 to the company at year-end 2024, which increased substantially from prior years. This could indicate reliance on director funding rather than operating cash flow.
• Limited Scale: As a micro-entity with only one employee on average, the company’s operational scale is modest, potentially limiting resilience to market or client fluctuations.
• Low Fixed Assets: The company holds minimal fixed assets (£200 in 2024), which may reflect a lack of physical capital investment, possibly impacting long-term operational capacity.

3. Positive Indicators:

• Solvency Improvement: Net current assets improved from a negative £300 in 2023 to a positive £15,179 in 2024, indicating better short-term liquidity.
• Equity Growth: Shareholders’ funds grew from £100 in 2023 to £15,379 in 2024, showing retained profits or capital injections strengthening the balance sheet.
• Compliance: The company is up to date with accounts and confirmation statement filings, reducing regulatory risk.
• No Indebtedness Beyond Current Liabilities: No indication of long-term borrowing or overdue liabilities.

4. Due Diligence Notes:

• Investigate the nature and terms of the director’s loan to ensure it is properly documented and sustainable for the company.
• Review cash flow statements (not provided) to assess operational cash generation versus reliance on director advances.
• Understand client base and contract stability given the small scale and specialized design/architectural activities.
• Confirm no contingent liabilities or off-balance sheet obligations exist that could affect solvency.
• Assess whether the minimal fixed asset base aligns with the company’s operational needs and growth plans.