Company Number: 13200059

Analysis Date: 2025-07-29 17:24 UTC

Financial Health Assessment for KENJI TECHNOLOGY LIMITED

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1. Financial Health Score: D

Explanation:
KENJI TECHNOLOGY LIMITED shows clear symptoms of financial distress, with persistent negative net assets and negative working capital (net current assets). This score reflects the company’s fragile financial condition, indicating challenges in meeting short-term obligations and an overall deficit in shareholder equity. While the company is still active and filing on time, the worsening negative equity and liabilities outweighing assets suggest caution.

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2. Key Vital Signs

Metric	2023 (£)	2024 (£)	Interpretation
Current Liabilities	104,382	187,915	High and increasing short-term debts indicate liquidity strain.
Net Current Assets (Working Capital)	-104,382	-187,915	Negative working capital: symptoms of cash flow difficulties.
Net Assets (Shareholders' Funds)	-110,284	-194,843	Negative equity: business owes more than it owns, serious concern.
Share Capital	100	100	Minimal capital base, limited financial buffer.
Number of Employees	1	1	Micro entity with minimal staffing, low operating scale.

Interpretation of Vital Signs:

• Negative Working Capital: The company’s current liabilities exceed current assets by a substantial margin, indicating it may struggle to pay its bills on time or finance daily operations without external support.
• Negative Net Assets: The company’s total liabilities exceed total assets by nearly £195k, illustrating a balance sheet "illness" akin to a patient with a critical deficiency in vital nutrients—here, capital.
• Increasing Liabilities: The jump in current liabilities from £104k to £188k year-over-year signals worsening financial strain or increased borrowing, which could be unsustainable.
• Minimal Share Capital: With only £100 in share capital, the company lacks a strong equity buffer to absorb losses or invest in growth.
• Micro Entity Profile: Limited scale and one employee suggest a small operational footprint, possibly limiting revenue generation capacity.

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3. Diagnosis

KENJI TECHNOLOGY LIMITED is exhibiting symptoms of financial distress marked by a deepening negative net asset position and negative working capital. The company’s balance sheet indicates it is "underweight" in terms of equity and has a growing burden of short-term liabilities that could compromise liquidity. Although the company remains active with timely filings, the financials reveal a "patient" struggling to maintain stability without infusion of fresh capital or improvement in cash management.

The absence of an audit (permitted for micro entities) limits visibility into detailed financial controls or operational efficiency, but the presented numbers alone suggest the company is currently in a precarious financial state. The nature of the business (information technology services) typically requires investment in talent and technology; however, with only one employee and minimal capital, growth and sustainability may be constrained.

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4. Recommendations

To improve financial wellness and stabilize the company’s financial health, the following steps are advised:

• Capital Injection: Seek new equity funding or shareholder loans to improve net assets and provide a cushion against liabilities. This is akin to providing essential nutrients to a patient to restore strength.
• Cost Control: Review operational expenses and liabilities to reduce the growing current liabilities. Negotiating extended payment terms with creditors may ease immediate cash flow pressures.
• Cash Flow Management: Implement rigorous cash flow forecasting and management to avoid liquidity crises. Focus on collecting receivables promptly and optimizing payment cycles.
• Revenue Enhancement: Explore increasing sales or service contracts to generate positive operating cash flow, which is critical for recovery and growth.
• Regular Monitoring: Establish monthly financial reviews to detect early signs of distress and respond proactively. This is like regular health check-ups to prevent worsening conditions.
• Consider Professional Advice: Engage with financial advisors or turnaround specialists to assist with restructuring or strategic planning.

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