Company Number: 13224608

Analysis Date: 2025-07-20 15:39 UTC

1. Risk Rating: MEDIUM
   Justification: Think FE Limited demonstrates positive net current assets and net assets, indicating solvency at the balance sheet date. However, the decline in net current assets and shareholders’ funds in the latest financial year, alongside a modest cash balance and significant tax liabilities, suggests moderate liquidity risk. The company is relatively young and small, which introduces operational and market risks typical for its size and sector.

2. Key Concerns:

• Liquidity Position: Cash reserves are low (£16,765), and current liabilities increased notably to £86,109, including a substantial corporation tax liability (£29,799), which may pressure short-term cash flows.
• Declining Net Current Assets and Equity: Net current assets fell from £43,116 in 2023 to £31,447 in 2024, and shareholders’ funds have decreased similarly, pointing to potential erosion of financial buffer.
• Limited Financial Disclosure: The accounts are filed under the small companies regime with no audited statements or detailed profit and loss information provided, limiting insight into profitability and operational performance.

3. Positive Indicators:

• Solvency Maintained: The company shows positive net assets and net current assets, evidencing that it can cover current liabilities with current assets.
• Timely Compliance: No overdue filings or accounts; confirmation statements and accounts are up to date, reflecting sound regulatory compliance.
• Stable Management and Ownership: Directors and persons with significant control have been consistent since incorporation, with clear ownership structure including a majority shareholder (Freedom Recruitment Group Ltd), which may provide operational support.

4. Due Diligence Notes:

• Review detailed profit and loss data to assess profitability and cash flow generation, which are absent from filed accounts.
• Investigate the nature and timing of tax liabilities and other creditors to understand cash flow demands and potential risks.
• Assess client concentration, contract terms, and debtor aging, especially given large trade debtor balances relative to cash.
• Confirm operational performance trends since incorporation and management strategy to address declining equity.
• Verify that related party transactions (noted significant ownership by Freedom Recruitment Group Ltd) are conducted at arm’s length.