HARK CONSULTANTS LIMITED

Executive Summary

Hark Consultants Limited has shown encouraging financial progress in its initial years, with a positive equity position and healthy working capital. Despite the large corporation tax liability and reliance on related party funding, the company demonstrates the capacity to meet short-term obligations. Conditional credit approval is recommended with close monitoring of cash flow and creditor payments to mitigate risk.

HARK CONSULTANTS LIMITED - Analysis Report

Company Number: 14671870

Analysis Date: 2025-07-29 18:12 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Hark Consultants Limited, incorporated in 2023, operates in the management consultancy sector and has demonstrated significant growth from a nominal financial base in 2023-24 to a more substantive asset and equity position in 2024-25. The company shows a positive net asset base (£28,735) supported by healthy net current assets (£27,249) and cash holdings (£54,030). However, the company is relatively new with limited operational history and has a material tax creditor (£44,942 corporation tax) and other liabilities due within a year (£66,381 total current liabilities), which warrants monitoring. The directors hold significant control and appear engaged, but the loan from a director (£1,527) interest-free and repayable on demand suggests some reliance on related party funding. Credit approval should be conditional on ongoing monitoring of trading performance and timely settlement of liabilities.

2. Financial Strength:
   The balance sheet as of 28 February 2025 shows a modest tangible fixed asset base (£1,968) primarily office equipment. Current assets are strong at £93,630, mainly comprising cash and trade debtors (£39,600). The company has a healthy working capital position with net current assets of £27,249. The presence of a deferred tax liability (£482) reflects timing differences on capital allowances but is immaterial relative to overall equity. Shareholders’ funds of £28,735 indicate a positive equity position with retained profits accumulated over the year. No long-term debt is reported, which reduces financial risk. Overall, the company’s financial strength is adequate for its size and stage but remains vulnerable to large creditor payments due within a year.

3. Cash Flow Assessment:
   Cash balances of £54,030 provide liquidity comfort, supporting short-term obligations. Trade debtors of £39,600 represent a significant portion of current assets and should be assessed for collectability to ensure cash inflows. Current liabilities total £66,381, including a large corporation tax liability (£44,942) and other taxes/social security (£18,112), which could pressure liquidity if not managed effectively. The director loan (£1,527) is interest-free and repayable on demand, indicating some flexibility in managing cash outflows. The company’s positive net current assets indicate working capital adequacy, but cash flow management remains critical to meet tax and other liabilities when due.

4. Monitoring Points:

• Timely payment of corporation tax and other current liabilities to avoid penalties or enforcement action.
• Continued collection of trade debtors to maintain liquidity.
• Ongoing profitability and accumulation of reserves to strengthen equity base.
• Any increases in related party transactions or director loans, which may indicate cash flow stress.
• Filing of next accounts and confirmation statement on time to ensure regulatory compliance.