KENT DESIGN AND MANAGEMENT LIMITED

Executive Summary

KENT DESIGN AND MANAGEMENT LIMITED has experienced a significant deterioration in its financial position in 2023, marked by negative working capital and net liabilities. This indicates liquidity stress and potential solvency risks, requiring urgent corrective actions to restore financial health. Immediate focus on cash flow management, cost control, and equity strengthening is essential to stabilize the business and improve its outlook.

KENT DESIGN AND MANAGEMENT LIMITED - Analysis Report

Company Number: 13155841

Analysis Date: 2025-07-20 17:56 UTC

Financial Health Assessment Report: KENT DESIGN AND MANAGEMENT LIMITED

---

1. Financial Health Score: D

Explanation:
The company shows worrying signs of financial distress in its most recent financial year (2023). Key indicators such as negative net current assets and net liabilities have emerged, reflecting a fragile liquidity position and potential solvency concerns. While the company was financially stable in previous years, the sharp deterioration in 2023 leads to a below-average rating.

---

2. Key Vital Signs

Metric	2023 (£)	2022 (£)	Interpretation
Fixed Assets	859	1,635	Slight decrease; minimal long-term investment.
Current Assets	36,943	57,142	Significant drop; reduction in liquid assets.
Current Liabilities	68,310	52,745	Increase; rising short-term obligations.
Net Current Assets	-31,367	4,397	Negative working capital; liquidity squeeze.
Total Assets Less CL	-30,508	6,032	Negative; company owes more than it owns.
Net Assets (Shareholders’ Funds)	-30,508	6,032	Negative equity; shareholder value eroded.
Share Capital	2	2	Nominal capital; no significant equity buffer.
Average Employees	1	1	Very small operation; limited human resource risk.

Interpretation of Vital Signs:

• Negative Net Current Assets ("Working Capital Deficiency"): The company’s short-term liabilities exceed its short-term assets by £31k, indicating a "symptom of distress" in its ability to cover immediate debts. This is akin to a patient whose blood pressure has dropped dangerously low—urgent attention is needed to restore balance.

• Negative Net Assets and Shareholders’ Funds: This reflects an erosion of the company’s net worth, suggesting accumulated losses or liabilities exceeding assets. Similar to a patient with weakened immune system, the company’s financial structure is impaired.

• Declining Fixed and Current Assets: A drop in assets suggests reduced operational resources or cash reserves, which may affect the company's capacity to function efficiently.

---

3. Diagnosis

• The company was financially stable in 2022 with positive net current assets and net assets, indicating a "healthy pulse" in its finances. However, the 2023 accounts reveal a sharp downturn.

• The negative working capital and net liabilities suggest liquidity problems, meaning the company may struggle to pay its short-term debts on time. This can be likened to a patient experiencing acute symptoms—an immediate cause for concern.

• The small size of the business (Micro category) and minimal equity buffer exacerbate financial vulnerability.

• No audit was required under micro-entity exemption rules, but the lack of detailed scrutiny means some risks may be underreported.

• The company operates in management consultancy (SIC 70229), a service industry that typically requires careful cash flow management since assets are mostly intangible.

---

4. Recommendations

Immediate Actions:

• Improve Liquidity Management: Focus on accelerating receivables, negotiating longer payment terms with suppliers, or injecting fresh working capital. Like giving a patient fluids to stabilize blood pressure, improving cash flow is critical.

• Cost Control: Review operating expenses closely to reduce unnecessary costs, preserving cash reserves.

• Equity Injection: Consider capital contributions from shareholders or external investors to restore positive net assets and enhance financial resilience.

• Monitor Creditors: Engage with creditors to manage payment schedules and avoid defaults, preventing a financial "infection" from worsening.

Medium Term Actions:

• Financial Forecasting and Planning: Implement robust cash flow forecasting to anticipate and prepare for cash shortages.

• Diversify Revenue Streams: If possible, expand client base or service offerings to reduce dependency on few contracts.

• Professional Advice: Seek financial and legal advice to explore restructuring options if liquidity issues persist.

Long Term Actions:

• Build Financial Buffers: Aim to maintain positive working capital and build retained earnings to withstand future shocks.

• Strengthen Governance: Ensure directors actively monitor financial health and compliance with reporting deadlines (currently up-to-date).

---