AMCO FLOORING LIMITED

1. Risk Rating: MEDIUM

The balance sheet indicates a solvent position with positive net assets, no apparent long-term borrowings, and no overdue regulatory filings. However, the accounts are filed under the small companies regime and the income statement is not delivered, so trading profitability cannot be assessed from the available data. Liquidity is adequate but dependent on the collection of trade debtors, and net assets remain below the levels reported in 2019.

2. Key Concerns

• Profitability cannot be verified: The latest filed accounts are filleted and exclude the profit and loss account. Without turnover, gross margin, or operating profit figures, it is not possible to determine whether the business generates sustainable trading profits or whether movements in net assets reflect operating performance or other capital movements.
• Liquidity is reliant on debtor collection: Cash at bank of £316,782 covers approximately two-thirds of current liabilities of £475,768. Trade debtors of £221,635 represent a significant portion of current assets and must be collected to meet obligations as they fall due. Trade creditors rose from £81,717 to £120,989 and taxation and social security liabilities rose from £118,518 to £149,580 year-on-year, indicating increased near-term obligations.
• Balance sheet contraction from historical peaks: Net assets have declined from £736,683 in 2019 to £527,361 in 2025, and cash has fallen from £619,212 to £316,782 over the same period. While there was a modest year-on-year improvement in 2025, the cause of the longer-term reduction cannot be established without the profit and loss account.

3. Positive Indicators

• Solvent capital position: Net assets of £527,361 and shareholders’ funds of the same amount provide a cushion against current liabilities. No long-term debt is apparent on the balance sheet, with only a small provision for liabilities of £1,065.
• Regulatory compliance: Accounts and confirmation statement are filed on time with no overdue items. The company has been active since incorporation in 1998 and is not in liquidation, administration, or receivership.
• Working capital: Net current assets are positive at £115,865, and cash reserves of £316,782 provide an operational buffer.
• Modest recent improvement: Net assets increased slightly from £515,994 to £527,361 between 2024 and 2025.

4. Due Diligence Notes

• Request the full statutory accounts, including the profit and loss account, to assess revenue trends, margins, and whether the business is profitable.
• Clarify the composition of “other creditors” (£205,199) and establish whether any amounts are owed to directors, related parties, or connected entities.
• Review debtor aging and credit control procedures given trade debtors of £221,635 relative to cash of £316,782.
• Confirm the nature of the land and buildings carried at £408,302 net book value, including ownership, lease terms, and any associated property commitments.
• Enquire about dividends or director drawings to explain the divergence between cash balances and net asset movements over recent years.
• Verify whether any contingent liabilities, guarantees, or off-balance sheet commitments exist.