I&K PROPERTY MANAGEMENT LIMITED

Executive Summary

I&K Property Management Limited operates with a strong fixed asset base in real estate but exhibits liquidity challenges due to high current liabilities and minimal working capital. The company’s net asset position has improved but remains thin, suggesting careful credit risk management. Conditional credit approval is recommended, subject to monitoring liquidity, debt servicing, and asset valuations closely.

I&K PROPERTY MANAGEMENT LIMITED - Analysis Report

Company Number: 13139790

Analysis Date: 2025-07-29 20:54 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   I&K Property Management Limited is a micro-entity engaged in buying and selling its own real estate, with a fixed asset base of £461,903 representing investment property. The company shows a positive net asset position of £1,693 as of January 2024, reversing a prior negative net asset position. However, current liabilities (£335,657) significantly exceed current assets (£7,827), resulting in a substantial negative net current asset position (-£124,074). This indicates potential liquidity stress and working capital constraints. The company’s ability to meet short-term obligations depends heavily on cash flow from property transactions or refinancing. Given the asset-heavy but cash-poor structure and limited equity buffer, credit approval should be conditional on additional guarantees or evidence of forthcoming liquidity improvements.

2. Financial Strength:
   The company’s balance sheet is dominated by a single investment property valued at £461,903 with no depreciation charged, indicating a stable asset base. Shareholders’ funds are very minimal (£1,693), reflecting limited retained earnings and equity. The high level of long-term creditors (£335,657) suggests significant debt financing against the property. The company’s working capital position is weak, with current liabilities greatly exceeding current assets, which is typical for property management firms but calls for close scrutiny of repayment terms. Overall, financial strength is fragile due to thin equity and high leverage.

3. Cash Flow Assessment:
   Current assets are very low (£7,827), mainly cash or receivables, while current liabilities are relatively high (£131,901), leading to negative net current assets. This suggests tight liquidity and potential reliance on refinancing or asset sales to service liabilities. The absence of depreciation and no additions or disposals indicate no recent cash flows from fixed assets. With only 2 employees and low operating overhead implied, operating cash outflows are likely limited, but cash inflows depend on property sales or rental income, which is not detailed. Monitoring cash flow projections and debt servicing capabilities is critical.

4. Monitoring Points:

• Liquidity trends: Monitor changes in current assets vs. current liabilities to assess short-term liquidity improvements or deterioration.
• Debt servicing: Track timely payments on creditors and long-term debt obligations to ensure no defaults.
• Asset valuations: Watch for market changes affecting investment property values which underpin company leverage.
• Equity position: Observe any capital injections or profit retention that strengthen shareholders’ funds.
• Director changes: Note the recent resignation of one director (May 2024) and ongoing control by Miss Inderpal Kaur Gill for governance continuity.