TODDLER TOWN MONTESSORI LTD

Executive Summary

Toddler Town Montessori Ltd exhibits improving financial health with increasing net assets and operational growth, supported by stable governance and timely statutory filings. However, reliance on director loans and low equity capitalization present moderate solvency and liquidity risks that warrant further financial scrutiny. Overall, the company reflects a medium risk profile typical for a growing micro-entity in the education sector.

TODDLER TOWN MONTESSORI LTD - Analysis Report

Company Number: 12775473

Analysis Date: 2025-07-29 13:55 UTC

1. Risk Rating: MEDIUM

The company demonstrates a positive upward trend in net assets and working capital over the last few years, indicating improving financial health. However, the presence of director loans and relatively low share capital, combined with a small asset base and modest scale of operations, highlight moderate financial risk typical for a micro-entity in its early years.

2. Key Concerns:

• Director Loans: Substantial unsecured, interest-free loans from directors remain on the balance sheet (£6,116 as of 2024), which may indicate reliance on director funding for liquidity and could pose repayment risk.
• Low Share Capital: The company’s share capital is only £2.00, which provides minimal equity buffer against losses or liabilities.
• Modest Working Capital: Although net current assets improved to £11,491 in 2024, the absolute level remains modest for operational resilience, and previous years showed borderline or negative working capital.

3. Positive Indicators:

• Improved Net Assets: Net assets increased from a negative position in 2020 (-£11,262) to a positive £8,027 in 2024, showing profitable operations or effective capital injections.
• Timely Compliance: The company is up to date with both accounts and confirmation statement filings, indicating good regulatory compliance.
• Operational Growth: Employee numbers increased from 4 to 7 within one year, suggesting business expansion and operational stability.
• Established Directors and PSCs: Directors have been consistent since incorporation, and persons with significant control are clearly identified, reflecting stable governance.

4. Due Diligence Notes:

• Investigate the terms and intentions regarding director loans, including repayment plans and potential impact on cash flow.
• Review detailed profit and loss accounts and cash flow statements to confirm sustainable profitability and liquidity beyond balance sheet snapshots.
• Assess customer and supplier contracts to understand revenue stability and operational risks.
• Confirm no pending legal or regulatory issues, given the absence of audit exemptions and no indications of director disqualifications or compliance failures.
• Examine the impact of accruals and deferred income (£5,644 in 2024) on short-term cash flow and operational funding.