Company Number: SC702953

Analysis Date: 2025-07-20 15:07 UTC

1. Risk Rating: HIGH
   The company shows significant negative net current assets and shareholders’ funds, indicating solvency issues. Current liabilities substantially exceed current assets, and this financial imbalance has worsened over the last two years. The company is reliant on director support for going concern, which adds risk.

2. Key Concerns:

• Solvency risk: Net current liabilities increased from £27,001 (2023) to £52,189 (2024), and shareholders’ deficit worsened from -£10,929 to -£39,332. This suggests the company’s liabilities far exceed its liquid resources and equity.
• Liquidity risk: Cash at bank is minimal (£102), far below current liabilities (£68,370). Debtors are modest and unlikely to cover short-term debts, creating potential cash flow stress.
• Related party exposure: A large creditor balance (£67,304) is owed to a related party under common control (Dowanhill Trading Company Limited), which may indicate dependence on insider funding or delayed payments to external suppliers.

3. Positive Indicators:

• The company remains active and compliant with filing requirements, with no overdue accounts or confirmation statements.
• Directors have maintained involvement since incorporation and have provided financial support via interest-free loans, reflecting commitment to the business.
• The company operates in essential retail and café sectors, which can have stable demand if managed well.

4. Due Diligence Notes:

• Investigate the nature and terms of the related party balance with Dowanhill Trading Company Limited, including repayment plans and any cross-guarantees.
• Review cash flow forecasts and working capital management to assess the company’s ability to meet imminent liabilities.
• Confirm whether any formal or informal arrangements exist with creditors to manage the significant shortfall in current assets.
• Explore the company’s strategy to return to profitability and rebuild equity, including any plans to raise external funding or restructure operations.
• Validate the accuracy of debtors balances and assess the collectability of these amounts.