Company Number: 14256728

Analysis Date: 2025-07-20 16:47 UTC

1. Risk Rating: LOW
   Two Bears Studio Limited exhibits sound financial health for a young company. It maintains positive net assets and net current assets, with no overdue filings and no signs of insolvency or distress. The liquidity position, while reduced in cash from previous year, remains adequate relative to short-term liabilities.

2. Key Concerns:

• Decline in cash reserves from £23,523 (2023) to £15,734 (2024) may warrant monitoring to ensure ongoing liquidity.
• Concentration of ownership and control with two individuals (Sean Davies and Abigail Davies) could present governance risks typical of closely held private companies.
• Relatively small scale and limited employee base (2 employees) could challenge operational scalability and sustainability in competitive specialist photography sector.

3. Positive Indicators:

• Net current assets improved from £6,752 in 2023 to £12,978 in 2024, indicating better short-term financial stability.
• Net assets increased substantially from £14,305 to £23,132, reflecting retained earnings and prudent asset management.
• No overdue statutory filings or indications of regulatory non-compliance.
• Tangible fixed assets have increased, indicating ongoing investment in operational capacity.

4. Due Diligence Notes:

• Review cash flow statements and creditor payment terms to confirm liquidity sufficiency and working capital management.
• Assess the impact of related party transactions or director loans if any, given the ownership structure.
• Investigate business model sustainability and client concentration risks in the specialist photography market.
• Confirm no contingent liabilities or off-balance sheet risks exist that could affect solvency.
• Validate deferred tax liability assumptions and the company's tax compliance status.