ARKH LIMITED

Executive Summary

ARKH Limited is a micro-entity with a very short operating history and declining financial health, evidenced by negative working capital and eroded equity. Its current liquidity position raises significant credit risk, suggesting an inability to reliably service debt at this time. Credit facilities are not recommended until financial stability and cash flow improvements are demonstrated.

ARKH LIMITED - Analysis Report

Company Number: 14573626

Analysis Date: 2025-07-29 19:00 UTC

1. Credit Opinion: DECLINE
   ARKH Limited exhibits weak financial resilience and limited capacity to service debt obligations at this stage. The latest accounts show net current liabilities (£1,607) and minimal net assets (£113), indicating liquidity stress and a balance sheet on the brink of insolvency. The company is micro-sized, newly incorporated in 2023, with only 2 employees and no audit conducted, implying limited operating history and transparency. The deterioration from net current assets of £2,695 in 2024 to net current liabilities in 2025 signals declining financial health. Without evidence of improving cash flow or capital injection, the risk of default on credit facilities is high.

2. Financial Strength:
   The balance sheet is fragile. Fixed assets are negligible (£1,720), and current liabilities exceed current assets as of the last year-end. Shareholders’ funds have shrunk from £2,695 to £113, reflecting losses or capital erosion. The company’s micro status means it has minimal asset coverage and limited equity buffer. This lack of financial strength raises concerns about the company’s ability to absorb operational shocks or meet creditor demands.

3. Cash Flow Assessment:
   Current liabilities exceed current assets, resulting in negative working capital. This suggests possible difficulties in meeting short-term obligations without additional financing or improved cash conversion cycles. The absence of detailed profit and loss data limits deeper cash flow analysis, but the net current liability position is a red flag for liquidity risk.

4. Monitoring Points:

• Monitor quarterly cash flow statements and liquidity ratios closely.
• Watch for capital injections or shareholder loans to bolster working capital.
• Track any changes in trade creditors and debtor aging to assess operational cash cycle.
• Review any updates in company filings or director commentary for strategic changes or turnaround plans.
• Observe any changes in director appointments or control that might affect governance and financial stewardship.