TAVYSOFT LIMITED

Risk Rating: MEDIUM Justification: While the company remains solvent with a healthy current ratio and no immediate signs of insolvency, there is a persistent and accelerating decline in net assets, retained earnings, and cash reserves. The consistent annual losses indicate an underlying operational sustainability issue that, if left unaddressed, could compromise the company's financial stability in the medium term.

Key Concerns: - Erosion of Equity and Retained Earnings: Shareholders' funds have dropped from £8,168 in 2024 to £4,973 in 2025, representing a loss of £3,195 for the year. This continues a downward trajectory from a peak of £24,147 in 2021, indicating the business is consistently operating at a loss. - Declining Cash Position: Cash at bank has fallen dramatically from £7,799 in 2024 to £3,856 in 2025 (a 50% drop year-on-year), and is down significantly from £34,926 in 2021. This rapid cash burn raises liquidity concerns if the company faces unexpected expenditures or a further decline in revenue. - Rising Long-Term Liabilities: Creditors due after more than one year have increased from £1,974 to £2,308, bucking the trend of reducing total liabilities. This suggests a potential shift toward longer-term obligations to fund ongoing operations.

Positive Indicators: - Strong Short-Term Liquidity: Current assets (£5,903) comfortably exceed current liabilities (£962), resulting in a current ratio of approximately 6.1:1. The company has ample working capital to meet its immediate short-term debts. - Regulatory Compliance: The company is up to date with its filing requirements. Accounts and confirmation statements are filed on time and are not overdue, suggesting competent administrative management. - Low Fixed Overheads: As a micro-entity with an average of two employees, the company likely maintains a low fixed-cost base, which could allow for rapid cost restructuring if revenues stabilize.

Due Diligence Notes: - Composition of Long-Term Creditors: It is imperative to determine whether the long-term creditors (£2,308) represent third-party debt, HP agreements, or director loans. If they are director loans, the risk profile differs significantly from arms-length debt. - Revenue and Profitability Trends: As the company files filleted accounts under the small companies regime, the Profit & Loss account is not publicly available. Direct confirmation of turnover and gross margins is needed to assess whether the core business model is viable or if losses are driven by one-off costs. - Director Resignation: The data notes the resignation of director Julie Fraser with a future-dated timestamp (2026-09-11). The circumstances of this resignation and its impact on the company's operational capacity (given the firm only has two employees) should be clarified.