Company Number: 13248394

Analysis Date: 2025-07-20 19:15 UTC

1. Risk Rating: HIGH
   Justification: The company shows significant and increasing net liabilities and negative working capital over several years, indicating serious solvency and liquidity concerns. The net current liabilities are substantial (£223,790 as of 2024), and net assets are deeply negative (£119,902). Despite being active and current with filings, the financial position suggests distress.

2. Key Concerns:

• Severe Negative Net Assets and Working Capital: The company’s net current liabilities have grown from approximately £48k to over £223k in one year, and net assets have deteriorated from negative £36k to nearly negative £120k. This suggests an inability to meet short-term obligations from current assets.
• High Short-Term Creditors: Creditors due within one year stand at £250,430, sharply higher than previous year and vastly exceeding current assets of £26,640. This mismatch poses a liquidity risk.
• Reliance on Director Advances for Dividends: Dividends of £26,000 each were paid to directors in 2024 despite the company’s negative equity and cash constraints, which raises questions on cash flow management and governance prudence.

3. Positive Indicators:

• Fixed Assets Growth: Tangible fixed assets have increased significantly from £24,141 to £110,252, indicating investment in operational capacity which could support future revenue.
• Timely Compliance: The company is up to date with its statutory filings and confirmation statements, suggesting good administrative discipline.
• Increasing Cash Balances: Cash at bank increased from £3,807 to £16,291, which might reflect some improvement in cash management or operational inflows despite overall financial stress.

4. Due Diligence Notes:

• Investigate the nature and terms of the significant short-term creditor balances, especially the “other creditors” which rose dramatically to £241,662. Clarify if these are trade payables, loans, or accruals.
• Review the company's cash flow statements and management accounts to assess operational cash generation or reliance on external funding.
• Examine the rationale and source of funds for dividend payments to directors in the context of negative equity and liquidity shortages.
• Assess any contingent liabilities or off-balance sheet commitments that could exacerbate financial risk.
• Confirm if there are any ongoing negotiations with creditors or restructuring plans to address the financial position.