K N K PROPERTIES (SOTON) LTD

Executive Summary

K N K PROPERTIES (SOTON) LTD is a newly incorporated property trading company with a weak financial foundation, evidenced by negative net assets and reliance on significant long-term creditors. Its current liquidity position and ability to service debt are constrained, presenting a high credit risk. Credit facilities are not recommended until financial health improves and operational cash flows are established.

K N K PROPERTIES (SOTON) LTD - Analysis Report

Company Number: 14212067

Analysis Date: 2025-07-20 17:08 UTC

1. Credit Opinion: DECLINE
   K N K PROPERTIES (SOTON) LTD shows a weak financial position for its first full year of trading. The company has net liabilities (£890) and negative shareholders’ funds (£990), indicating the business is currently insolvent on a balance sheet basis. The substantial long-term creditor balance (£264,253) suggests significant debt or loan obligations. Given the negative net current assets and minimal working capital buffer, the company’s ability to meet short-term obligations and service debt is questionable. Without evidence of incoming cash flow or profitability, the risk of lending or extending credit is high. Management’s financial stewardship appears limited, as the company is in a start-up phase with limited operational history and significant leverage.

2. Financial Strength: Weak
   The balance sheet is dominated by a tangible fixed asset of £264,154 (likely property), offset by creditors due after one year of £264,253, effectively canceling out the asset value. The minimal current liabilities (£791) are covered by cash or equivalents, but net current assets are negative (£-791). Shareholders’ funds are negative, reflecting accumulated losses or initial capital injection insufficient to cover liabilities. The company’s balance sheet lacks equity cushion, making it vulnerable to any downturn or unexpected expenses.

3. Cash Flow Assessment: Constrained
   There is no detailed cash flow statement provided, but the negative net current assets and minimal current liabilities suggest limited liquidity. The company’s working capital position is negative, and reliance on long-term creditors indicates dependency on external funding rather than operational cash flow. The company employs only two people, suggesting low overhead but also limited operational scale to generate significant cash inflows. Without turnover or profitability data, cash generation capacity is uncertain.

4. Monitoring Points:

• Monitor future annual accounts for improvements in net assets and profitability.
• Track cash flow statements to assess liquidity trends and ability to service debt.
• Watch for any restructuring of long-term creditor balances or additional equity injections.
• Review any changes in management or strategy that could impact financial stability.
• Observe compliance with filing deadlines and any changes in company status.