COGNITO TECHNOLOGIES LTD

Executive Summary

COGNITO TECHNOLOGIES LTD exhibits strong financial fundamentals with growing net assets and positive working capital, suggesting low solvency and liquidity risks. However, the high proportion of debtors in current assets and limited cash reserves warrant closer examination to ensure ongoing operational liquidity. The company maintains good compliance records and stable ownership structure, supporting operational stability.

COGNITO TECHNOLOGIES LTD - Analysis Report

Company Number: 12829306

Analysis Date: 2025-07-20 17:28 UTC

1. Risk Rating: LOW
   The company demonstrates a solid net asset base relative to its liabilities, positive working capital, no overdue filings, and recent financial growth, indicating low solvency and liquidity risks.

2. Key Concerns:

• Reliance on Debtors: A significant portion of current assets (approximately 87%) is tied up in debtors (£28,473 of £32,645), which may impact liquidity if collections slow.
• Limited Cash Reserves: Cash on hand is modest (£4,172), which could be a concern for unexpected short-term obligations despite positive net current assets.
• Small Share Capital: Share capital is minimal (£100), which may limit the company’s capacity to absorb large losses without external financing.

3. Positive Indicators:

• Increasing Net Assets and Shareholders’ Funds: Net assets increased from £14,109 in 2023 to £18,785 in 2024, showing growth and retained profitability.
• Positive Working Capital: Net current assets improved significantly to £14,996, indicating the company can meet its short-term liabilities.
• Timely Compliance: All statutory filings, including accounts and confirmation statements, are up to date with no overdue status, reflecting good governance and compliance.
• Stable Management: Presence of a single controlling director with full ownership and voting rights may facilitate decisive management.

4. Due Diligence Notes:

• Investigate the ageing profile of debtors to assess credit risk and potential liquidity impact if collections are delayed.
• Review cash flow statements (not provided) to confirm operational cash generation and adequacy of cash reserves.
• Consider the company’s business model and client concentration to evaluate sustainability of revenues and risk exposure.
• Confirm no undisclosed contingent liabilities or litigation risks that might affect financial stability.
• Validate the adequacy of depreciation policies on fixed assets and any potential impairment risks.