WORK PLAY USA LTD

Executive Summary

Work Play USA Ltd shows a moderate risk profile due to a significant decline in assets and net worth in the latest financial year, which warrants further investigation into its operational and cash flow stability. The company remains solvent with positive working capital and compliant with filing requirements, but the reduction in debtor balances and minimal share capital are notable concerns. Further due diligence is recommended to clarify these issues before investment consideration.

WORK PLAY USA LTD - Analysis Report

Company Number: SC689228

Analysis Date: 2025-07-29 21:06 UTC

1. Risk Rating: MEDIUM
   The company exhibits a moderate risk profile primarily due to a significant reduction in net assets and current assets from 2023 to 2024, which could indicate liquidity or operational challenges. However, it retains positive net assets and working capital, and filings are up to date, which mitigates immediate solvency concerns.

2. Key Concerns:

• Sharp decline in current assets and net assets between 2023 (£75,585 current assets, £66,922 net assets) and 2024 (£18,916 current assets, £17,620 net assets), suggesting potential cash flow or operational issues.
• Drastic reduction in debtors from £37,332 (2023) to £1,992 (2024) might indicate loss of revenue or client base, or aggressive debt collection affecting future sales.
• Very low share capital (£2) which provides minimal equity buffer against liabilities or unexpected losses.

3. Positive Indicators:

• Positive net current assets (£15,985) and net assets (£17,620) as at 31 August 2024, indicating the company can currently cover short-term obligations.
• No overdue filings for accounts or confirmation statements, reflecting good regulatory compliance.
• Directors are resident in the UK with no indication of disqualifications or governance issues.
• The company is small with only two employees, potentially allowing for nimble operational adjustments.

4. Due Diligence Notes:

• Investigate reasons behind the significant drop in current assets and net assets between 2023 and 2024, including revenue trends and client retention.
• Review detailed accounts or management reports to understand the low debtor balance in 2024 and its impact on turnover and cash flow sustainability.
• Confirm the nature and timing of any liabilities not reflected in current liabilities, including deferred tax provisions.
• Assess operational model and growth prospects given the travel agency industry classification and market conditions.
• Check for any off-balance sheet exposures or contingent liabilities that may affect solvency.