THIRTY TWO HERTZ LTD

Executive Summary

THIRTY TWO HERTZ LTD shows significant financial distress with persistent negative net current assets and shareholders' funds, raising high solvency and liquidity risks. While statutory compliance is maintained and the director expresses confidence in going concern, reliance on director loans and lack of profitability data warrant careful scrutiny. Further due diligence should focus on cash flow, director loan terms, and operational viability to assess the company’s recovery prospects.

THIRTY TWO HERTZ LTD - Analysis Report

Company Number: 13114651

Analysis Date: 2025-07-20 12:48 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns, with persistent and growing net current liabilities and negative shareholders’ funds. These factors indicate a high risk of financial distress without corrective measures.

2. Key Concerns:

• Negative Net Current Assets: The company’s net current liabilities increased from £36,162 in 2023 to £47,957 in 2024, indicating worsening short-term liquidity and potential inability to meet current obligations as they fall due.
• Negative Shareholders’ Funds: The company’s accumulated losses have resulted in negative equity of £43,084 as of March 2024, which raises concerns about the company’s long-term solvency and financial sustainability.
• Director’s Loan Account: A substantial director’s loan balance of £42,094 as at year-end suggests reliance on director financing. This could indicate cash flow difficulties and potential related party risk if the loan is not formalized or repayable on demand.

3. Positive Indicators:

• No Overdue Filings: The company is current with its statutory accounts and confirmation statement filings, indicating compliance with Companies House requirements and a degree of governance discipline.
• Going Concern Statement by Director: The director asserts a reasonable expectation of adequate resources to continue operations, suggesting some confidence in ongoing support or underlying business prospects.
• Tangible Fixed Assets Growth: Tangible fixed assets increased from £1,747 to £4,973, indicating investment in operational capacity which could support future revenue generation.

4. Due Diligence Notes:

• Examine Cash Flow and Working Capital Management: Further analysis of cash flow statements and working capital cycles is needed to assess how the company intends to address its liquidity shortfall.
• Review Director Loan Terms: Investigate the nature, terms, and repayment plans of the director’s loan account to evaluate any contingent liabilities or risks to other creditors.
• Assess Revenue Generation and Profitability Trends: Since profit and loss details are not filed, request management accounts or additional disclosures to understand operational performance and prospects for returning to profitability.
• Consider External Funding or Restructuring Plans: Enquire if there are plans for capital injection, refinancing, or restructuring to restore solvency and liquidity.