THE POLISHING PAD LTD

Executive Summary

THE POLISHING PAD LTD exhibits a high financial risk profile due to negative net assets and disproportionate current liabilities relative to current assets, signaling solvency and liquidity challenges. While regulatory compliance is maintained and the company remains active, the erosion of shareholders' funds and declining fixed assets warrant close scrutiny. Further due diligence on liabilities, cash flows, and operational viability is recommended before investment consideration.

THE POLISHING PAD LTD - Analysis Report

Company Number: 12731052

Analysis Date: 2025-07-29 15:06 UTC

1. Risk Rating: HIGH
   The company shows signs of financial distress with negative net assets reported in the latest accounts and significant liabilities exceeding current assets. The pattern of declining net assets and high current liabilities indicates a solvency risk.

2. Key Concerns:

• Negative Net Assets: The 2024 accounts show net liabilities of £2,828, suggesting the company’s liabilities exceed its assets, raising solvency concerns.
• High Current Liabilities Relative to Current Assets: Current liabilities (£13,681) far exceed current assets (£1,105), indicating potential liquidity issues and difficulty meeting short-term obligations.
• Declining Fixed Assets and Shareholders’ Funds: Fixed assets decreased from £23,105 in 2020 to £9,747 in 2024, and shareholders’ funds have eroded from £9,402 to negative values, indicating weakening financial stability.

3. Positive Indicators:

• Compliance: Accounts and confirmation statements are filed on time with no overdue filings, indicating good regulatory compliance.
• Business Continuity: The company is active since incorporation in 2020 with consistent director appointments and no reported insolvency processes.
• Micro-entity Status: Small scale operations (one employee on average) may indicate manageable operational complexity.

4. Due Diligence Notes:

• Investigate the nature and terms of the significant liabilities, particularly the large current liabilities and any creditors falling due after one year.
• Review cash flow statements and working capital management to assess liquidity beyond the balance sheet snapshot.
• Examine management strategies for addressing ongoing losses or negative equity, including any recent operational changes or restructuring.
• Confirm absence of director disqualifications or related party transactions that could pose governance risks.
• Understand the business model in treatment and coating of metals sector and its revenue generation given the low asset base and financial strain.