Company Number: 13122776

Analysis Date: 2025-07-20 12:24 UTC

1. Risk Rating: HIGH

Justification: The company’s latest financial statements show significant net current liabilities of £28,025 and negative net assets of the same amount, indicating insolvency on a balance sheet basis. The current liabilities (£60,153) exceed current assets (£32,128) by a considerable margin. Cash holdings are negligible (£11), suggesting liquidity constraints. Although the directors assert a going concern basis, the financial data points to a high risk of inability to meet short-term obligations.

2. Key Concerns:

• Solvency: Negative net assets and net current liabilities indicate the company is balance sheet insolvent.
• Liquidity: Extremely low cash reserves (£11) versus high short-term liabilities raises serious cash flow concerns.
• Creditor Exposure: A large proportion of creditors are classified as “Other Creditors” (£48,041), which warrants further scrutiny regarding the nature and terms of these liabilities.

3. Positive Indicators:

• The company is current on statutory filings (accounts and confirmation statements), indicating regulatory compliance.
• Directors report experiencing good sales growth and profitability, though this is not yet reflected in the financial position.
• The company employs a small number of staff (average 2), which may allow for flexible cost management.

4. Due Diligence Notes:

• Verify the composition and age of “Other Creditors” to assess if liabilities are overdue or subject to dispute.
• Review cash flow forecasts and management accounts for post-reporting date periods to assess operational cash generation.
• Investigate the debtor base (£32,117) to confirm collectability and reduce risk of bad debts.
• Assess directors’ plans and evidence supporting the going concern assumption, given the weak financial position.
• Confirm no undisclosed contingent liabilities or legal claims that could worsen financial distress.