Company Number: 12384860

Analysis Date: 2025-07-29 14:27 UTC

1. Risk Rating: HIGH
   The company exhibits a high risk profile primarily due to its severely negative net current asset position, indicating potential liquidity problems and inability to cover short-term liabilities.

2. Key Concerns:

• Liquidity Deficit: The balance sheet shows current liabilities (£324,762) vastly exceeding current assets (£3,001), resulting in a net current liability of £321,761 as of January 2024, consistent over previous years. This suggests persistent cash flow constraints.
• High Short-Term Debt: The majority of current liabilities are bank loans and overdrafts (£259,984), signaling reliance on external borrowing with imminent repayment obligations.
• Limited Equity and Capital: Share capital is minimal (£2), and shareholders’ funds are low (£15,285), providing limited buffer against financial shocks or operational losses.

3. Positive Indicators:

• Tangible Fixed Assets: The company holds significant fixed assets in freehold property valued at £337,046, which may support borrowing capacity or be a source of future liquidity if sold.
• No Overdue Filings: Both accounts and confirmation statements are up to date, indicating regulatory compliance and good governance in terms of statutory filings.
• Stable Management: The directors have been in post since incorporation with no adverse information, suggesting stable leadership.

4. Due Diligence Notes:

• Investigate the nature and terms of the bank loans and overdrafts—repayment schedules, interest rates, and any covenants that may affect solvency.
• Assess the company's operational model and revenue streams to understand if the negative working capital is due to timing of cash flows or structural issues.
• Clarify related-party transactions or guarantees, especially given the directors' dual roles and ownership stakes.
• Review any contingent liabilities or off-balance sheet commitments not disclosed in the accounts.
• Confirm the valuation and marketability of the fixed asset property to evaluate its potential to offset liabilities if needed.