Company Number: SC684613

Analysis Date: 2025-07-29 20:25 UTC

1. Risk Rating: HIGH
   The company shows clear signs of financial distress indicated by negative net current assets and shareholders’ funds in the latest financial year. The insolvency risk is elevated given the inability to cover current liabilities with current assets and a deteriorating equity position.

2. Key Concerns:

• Solvency Issues: The company’s total assets less current liabilities dropped from a positive £1,530 in 2023 to a negative £1,000 in 2024, with shareholders’ funds also moving from positive £1,530 to negative £1,100. This indicates potential insolvency and inability to meet obligations.
• Liquidity Constraints: Cash balance is very low (£1,715) relative to current liabilities (£6,713), exacerbating short-term liquidity risks. Absence of debtors in the latest year also suggests reduced incoming cash flow.
• Operational Sustainability: The company has minimal share capital (£100) and is showing a decline in retained earnings, raising concerns about its ongoing operational viability without external capital infusion or improvement in trading performance.

3. Positive Indicators:

• The company is compliant with statutory filing requirements (accounts and confirmation statement up to date, no overdue filings).
• Directors appear stable with no disclosed disqualifications or governance issues.
• The company benefits from exemption from audit, reducing administrative burdens and costs.

4. Due Diligence Notes:

• Investigate the nature and valuation of the fixed asset investments (£3,998) reported at market value to assess their realizability and support to solvency.
• Review detailed profit and loss data (not included here) to understand underlying operational performance and cash flow generation capability.
• Clarify the cause of the sharp deterioration in financial position between 2023 and 2024, including any extraordinary expenses or write-downs.
• Confirm if there are any contingent liabilities or off-balance sheet obligations that might exacerbate financial risk.
• Assess the relationship and transactions with related parties, particularly directors who are also landlords, to identify any potential conflicts or financial dependencies.