Company Number: 13105117

Analysis Date: 2025-07-20 13:21 UTC

1. Risk Rating: MEDIUM
   The company shows positive net assets and a stable investment property asset base; however, it has persistent negative net current assets and significant long-term liabilities secured by property. These factors suggest moderate solvency risk and liquidity concerns.

2. Key Concerns:

• Negative net current assets (~£15k deficit) for multiple years indicate potential liquidity constraints to cover short-term obligations.
• High secured bank loan (£106,797) relative to net assets and cash balances, implying leverage and dependency on property valuation and refinancing risk.
• Minimal cash holdings (£2,369) limit operational flexibility and increase vulnerability to short-term cash flow shocks.

3. Positive Indicators:

• The company holds investment property valued at £140,000 with a recent upward revaluation, supporting asset backing for liabilities.
• Shareholders’ funds have increased from negative in 2020 to positive (£18,010 in 2023), indicating improving equity position.
• No overdue filings or compliance issues noted; filings are up-to-date with Companies House.

4. Due Diligence Notes:

• Review the terms and maturity profile of the secured bank loan and any covenants to assess refinancing and default risk.
• Obtain detailed cash flow forecasts and debtor aging to evaluate liquidity management and debtor collectability.
• Verify valuation methodology and frequency for investment property to ensure asset values adequately support loan security.
• Investigate the company’s income generation capacity and operational model given the limited number of employees and abridged accounts.