IV & KO LTD

Executive Summary

IV & KO LTD is financially distressed with sustained negative equity and working capital deficits, indicating a poor ability to meet debt obligations. The company relies heavily on director loans and lacks sufficient liquidity, making credit approval unsuitable at this time. Continuous monitoring of liquidity and director funding is essential should the company’s financial position improve.

IV & KO LTD - Analysis Report

Company Number: 13368551

Analysis Date: 2025-07-20 11:55 UTC

1. Credit Opinion: DECLINE. IV & KO LTD exhibits significant financial distress with persistent negative net assets and net current liabilities over the last four years. The company's working capital position is heavily negative (£-43,176 as at 30 April 2024), indicating an inability to meet short-term obligations from current assets. The large balance on directors’ current accounts (£66,603) suggests reliance on director loans to finance operations, raising concerns about liquidity and financial sustainability. Without evidence of profitability or improved cash flow, the company is not currently creditworthy for new lending.

2. Financial Strength: The balance sheet shows total net assets of £-36,207 at the latest year-end, deteriorating slightly from £-35,346 the previous year. Fixed assets are minimal (£6,969) and largely offset by significant current liabilities (£74,771). The company’s share capital is nominal (£1) and shareholders’ funds are deeply negative, reflecting accumulated losses. The primary source of funding appears to be director loans, which are substantial and increasing. The company’s financial structure is weak and highly leveraged, with no equity cushion to absorb further losses or financial shocks.

3. Cash Flow Assessment: Cash on hand is minimal (£176), and debtors (£850) are negligible relative to current liabilities, confirming tight liquidity. The company carries overstock (£30,569) which may be slow moving or difficult to liquidate quickly. Negative net current assets highlight an ongoing working capital deficiency and poor short-term liquidity. The company appears dependent on director funding to maintain operations and is at risk of defaulting on liabilities if this support diminishes.

4. Monitoring Points:

• Track changes in net current assets and liquidity ratios quarterly to identify any improvement or further deterioration.
• Monitor director loans and related party transactions for signs of increased financial support or withdrawal.
• Review stock turnover and debtor collection to assess working capital management.
• Watch for filing compliance and any director changes that might indicate instability.
• Assess any planned capital injections or restructuring efforts to restore balance sheet health.