KANEXY LTD

Executive Summary

KANEXY LTD has shown a positive financial recovery with stable working capital and growing equity since its inception in 2021. The company is currently financially healthy but should focus on strengthening liquidity and capital to sustain growth and buffer against short-term risks. Investing in market presence and careful cost management will support continued financial wellness.

KANEXY LTD - Analysis Report

Company Number: 13132304

Analysis Date: 2025-07-20 13:59 UTC

Financial Health Assessment Report for KANEXY LTD

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1. Financial Health Score: B

Explanation:
KANEXY LTD demonstrates stable and improving financial health indicators typical of a micro-entity in its growth phase. The company maintains positive net current assets and shareholders' funds, showing an ability to meet short-term obligations and preserve equity. While not yet robustly capitalized, the gradual improvement from prior years and a growing employee base indicate positive momentum. The score "B" reflects a generally healthy condition with room for strengthening liquidity and capital structure.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	106,500	Adequate short-term resources, primarily cash and receivables, to support operations.
Current Liabilities	95,662	Obligations due within one year; close to current assets but still covered.
Net Current Assets (Working Capital)	10,838	Positive working capital indicates healthy short-term liquidity, but margin is narrow.
Net Assets / Shareholders' Funds	10,838	Positive equity value reflects residual interests after liabilities, showing solvency.
Share Capital	1.00	Minimal share capital typical of micro-entity; most equity is accumulated reserves.
Employee Count	8	Growth from 6 to 8 employees suggests expanding business activity.
Trend in Net Current Assets	Improved from negative (-7,185 in 2021) to positive (10,838 in 2024)	Indicates recovery from initial liquidity stress to a stable state.

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3. Diagnosis: Underlying Business Health

• Liquidity Status: The company shows a "healthy cash flow" symptom with net current assets positive for the last three years, recovering from an initial "symptom of distress" in 2021 when liabilities exceeded current assets. This indicates improved working capital management and better collection of receivables or control over short-term debts.

• Solvency and Capital Structure: Shareholders’ funds are modest but positive, signalling that the business is solvent and has built some retained earnings. However, the extremely low share capital (£1) suggests limited initial funding, with growth financed through operations or external means.

• Operational Expansion: The increase in employee numbers from 6 to 8 over the last year is a positive sign of scaling activity and confidence in business prospects, but also implies increased fixed costs that must be monitored carefully.

• Revenue & Profitability (Inferred): While detailed profit and loss data is unavailable, steady growth in net assets and working capital implies ongoing profitability or at least breakeven operations. The nature of the business (IT consultancy and software development) typically involves low fixed assets and reliance on human capital.

• Risks & Concerns: The narrow margin between current assets and liabilities (only £10,838) means any unexpected cash flow disruptions could cause liquidity strain. The company should be cautious of overextension or delayed client payments.

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4. Recommendations: Path to Improved Financial Wellness

• Strengthen Liquidity Buffer: Aim to increase net current assets by building cash reserves or reducing short-term liabilities to create a more comfortable working capital margin. This can be achieved through tighter credit control on debtors and negotiating extended payment terms with suppliers.

• Capital Injection: Consider increasing share capital or securing additional equity funding to strengthen the balance sheet and support expansion plans, reducing reliance on short-term liabilities.

• Monitor Employee Costs: With growing headcount, implement robust budgeting and forecasting to ensure wage expenses remain aligned with revenue growth, avoiding overcapacity.

• Profitability Focus: Track detailed profitability metrics to detect any erosion of margins early. Focus on high-margin projects and cost control.

• Website & Market Presence: The current website is a domain parking page, which may hinder client acquisition and brand credibility. Developing an active, professional website will support business growth and client engagement.

• Maintain Compliance: Continue timely filing of accounts and confirmation statements to avoid penalties or regulatory issues.

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