THE COFFEE STORE LEITH LTD

Executive Summary

The Coffee Store Leith Ltd demonstrates significant solvency and liquidity risks, with persistent negative net assets and current liabilities exceeding current assets. While compliance and stable management are positive, the company’s financial position raises concerns about its ability to meet obligations without intervention. Further investigation into cash flows, operational performance, and strategic plans is recommended to fully assess sustainability.

THE COFFEE STORE LEITH LTD - Analysis Report

Company Number: SC698362

Analysis Date: 2025-07-20 14:07 UTC

1. Risk Rating: HIGH
   The company exhibits persistent and significant net liabilities and negative net current assets over multiple years, indicating ongoing solvency and liquidity challenges. The worsening net asset position from -£7,502 in 2021 to -£9,030 in 2024, despite slight improvement from 2023, signals financial strain.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Funds: The company has reported negative equity consistently, reflecting accumulated losses and potential insolvency risk.
• Negative Net Current Assets: Current liabilities exceed current assets, pointing to liquidity risk and potential difficulties meeting short-term obligations.
• Small Scale with Minimal Capital: The share capital is nominal (£2), which may limit the company’s ability to raise funds internally or externally in distress.

3. Positive Indicators:

• Timely Compliance: The company is up to date with accounts and confirmation statement filings, showing adherence to regulatory requirements.
• Stable Management: Directors have remained consistent since incorporation, suggesting stable governance.
• Micro-entity Status: This limits reporting burden and may reduce overhead costs, potentially easing operational pressures.

4. Due Diligence Notes:

• Investigate the company’s cash flow statements and profit and loss accounts to understand operational cash generation and loss drivers.
• Review any related party transactions or director loans that may impact solvency.
• Assess business plans or strategies for turnaround given ongoing losses and insolvency indicators.
• Confirm if there are any contingent liabilities or impending creditor actions not reflected in current filings.
• Consider the competitive environment in the retail food sector and impact on sales and margins.