Company Number: 13638103

Analysis Date: 2025-07-29 14:03 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   HKA Consultancy Ltd is an active private limited company operating in administrative and management consultancy activities. The company shows positive net assets and shareholders' funds, indicating some capital base. However, the company has consistent and significant net current liabilities over the past years, most notably a net current liability of £23,379 at the latest year-end, driven by current liabilities exceeding current assets. This negative working capital position raises concerns about short-term liquidity and the ability to meet current obligations promptly. The reliance on directors’ current accounts (£15,841) as a significant component of creditors suggests related-party funding, which may not be as stable or enforceable as third-party liabilities. Approval for credit should therefore be conditional on obtaining additional security or evidence of improved liquidity or cash flow management.

2. Financial Strength:
   The balance sheet reflects a growing fixed asset base (£63,997 in 2024 vs. £44,318 in 2023), indicating investment in tangible assets such as vehicles, fixtures, and equipment. Shareholders’ funds increased from £37,864 in 2023 to £40,618 in 2024, showing retained earnings accumulation and a stronger equity cushion. However, current liabilities remain materially higher than current assets, with a deteriorating net current asset position. The company’s gearing cannot be fully assessed without long-term liabilities disclosed, but the significant current liabilities and negative working capital position highlight financial strain in the short-term. The company is small, has no audit requirement, and presents limited financial disclosure, restricting a full assessment of financial robustness.

3. Cash Flow Assessment:
   Cash at bank dropped significantly from £24,848 in 2023 to £155 in 2024, a critical red flag regarding operational liquidity. Debtors have also decreased from £4,250 to £1,300 but include a prepayment component, which is less liquid. The mismatch between cash availability and short-term liabilities (£24,834) suggests potential cash flow stress. The negative net current assets position further confirms potential difficulties in settling creditors on time without additional cash inflows or financing. The presence of directors’ current accounts as creditors could indicate reliance on director funding to manage cash shortfalls, which may not be sustainable in the long term.

4. Monitoring Points:

• Monitor cash balances and liquidity ratios closely on a monthly basis to ensure the company can meet short-term commitments.
• Track the aging profile of debtors to assess the quality and collectability of receivables.
• Review changes in directors’ current account balances to determine if continued related-party financing is supporting liquidity.
• Observe capital expenditure and fixed asset additions to ensure they are aligned with cash generation capability.
• Assess any changes in current liabilities, especially tax and other creditors, for payment delays or accruals that could indicate financial pressure.
• Evaluate management actions to improve working capital, such as negotiating longer payment terms or accelerating collections.