IT DOMAIN CONSULTANCY LTD

Executive Summary

It Domain Consultancy Ltd is an active small IT consultancy with recent financial deterioration reflected in negative net assets and net current liabilities, signaling solvency and liquidity risks. While regulatory compliance is maintained and control is centralized, the financial position and shrinking workforce present challenges to operational sustainability. Further due diligence is recommended to clarify underlying causes and assess recovery prospects.

IT DOMAIN CONSULTANCY LTD - Analysis Report

Company Number: 13889795

Analysis Date: 2025-07-20 18:47 UTC

1. Risk Rating: HIGH
   The company’s financials for the year ending 29 February 2024 show a negative net asset position (£-902) and net current liabilities (£-1,135), indicating solvency and liquidity challenges despite being an active entity within a relatively new operational period.

2. Key Concerns:

• Solvency Risk: The company has moved from positive net assets (£2,744) in 2023 to negative net assets (£-902) in 2024, implying erosion of equity and potential insolvency risk.
• Liquidity Concerns: Current liabilities (£4,797) exceed current assets (£3,662), with cash on hand critically low at £2, limiting the company’s ability to meet short-term obligations.
• Operational Sustainability: The average employee count has decreased from 2 to 1, which may indicate downsizing or operational contraction; combined with negative reserves, this raises questions about business sustainability and growth prospects.

3. Positive Indicators:

• Compliance Status: The company is up to date with both accounts and confirmation statement filings, showing good regulatory compliance.
• Control and Governance: The sole director, Mr. Mohammed Ashfaq, holds significant control (75-100%) and is also the sole employee, suggesting centralized decision-making, which may streamline operations in a small consultancy.
• Industry Activity: Operating within IT consultancy (SIC 62020), a sector with demand potential, providing opportunity for future revenue growth if operational challenges are addressed.

4. Due Diligence Notes:

• Investigate the cause of the significant increase in current liabilities from £3,120 (2023) to £4,797 (2024) and the nature of these creditors to assess repayment risks.
• Review detailed profit and loss data (not filed) to understand revenue trends, cost structure, and reasons behind the negative reserves and reduced cash balance.
• Assess any contingent liabilities or provisions not disclosed that might affect financial stability.
• Understand the company’s cash flow cycle, debtor collection efficiency given the consistent debtor figure (£3,660) despite reduced cash and increased liabilities.
• Confirm ongoing operational plans and pipeline for new business, given the reduction in workforce and negative equity.