Company Number: 14057351

Analysis Date: 2025-07-29 20:02 UTC

1. Risk Rating: HIGH
   The company shows persistent net current liability and negative shareholders’ funds over the last two financial years, indicating solvency risks. The cash position is very low relative to current liabilities, which raises liquidity concerns. The negative equity position and accumulated losses highlight potential operational and financial instability.

2. Key Concerns:

• Solvency risk: Negative net assets of £2,288 as of April 2024, worsening from previous years, suggest the company’s liabilities exceed its assets.
• Liquidity concerns: Cash on hand is only £856 against current liabilities of £20,643, indicating potential difficulties meeting short-term obligations without additional financing.
• Dividend payments despite losses: The company paid dividends of £56,000 in 2024 and £30,000 in 2023 despite accumulating losses, which may indicate poor governance or financial management practices.

3. Positive Indicators:

• Active status with no overdue filings: The company is active and compliant with filing deadlines for accounts and confirmation statements, suggesting regulatory compliance and administrative diligence.
• Single director and PSC with full control: Xxxxxx Xxxxxxxxname shown to subscribers is the sole director and 100% shareholder, which may allow for streamlined decision-making and accountability.
• Growing debtor balances: Trade debtors increased significantly from £2,983 in 2023 to £15,780 in 2024, which could indicate increasing sales or services provided, assuming collectability is good.

4. Due Diligence Notes:

• Investigate the nature and collectability of the trade debtors, especially the significant increase in 2024, to assess liquidity risk further.
• Review the rationale and legality of dividend payments given persistent losses and negative equity, including whether distributions comply with Companies Act provisions.
• Assess the company’s business plan and cash flow forecasts to understand how it intends to remedy its working capital deficit and negative net assets.
• Confirm absence of any director disqualifications or regulatory sanctions beyond publicly available data.
• Examine underlying causes of losses and whether operational improvements or capital injections are planned.