KEY TRADE&CONSULT LIMITED

Executive Summary

KEY TRADE&CONSULT LIMITED is a small, micro-entity management consultancy experiencing a recent decline in net assets due to increased accruals and deferred income. The company maintains positive working capital but shows signs of financial pressure that warrant conditional credit approval pending improved cash flow visibility. Careful ongoing monitoring of liquidity and equity trends is recommended to mitigate potential credit risk.

KEY TRADE&CONSULT LIMITED - Analysis Report

Company Number: 13258558

Analysis Date: 2025-07-20 15:58 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   KEY TRADE&CONSULT LIMITED is a micro-entity operating in management consultancy, with a very small equity base (£1 share capital) but positive net assets. The company shows a significant decline in net assets from £5,741 in 2023 to £1,609 in 2024, primarily due to increased accruals and deferred income (£2,000 up from £1,000), indicating potential timing issues in revenue recognition or billing. While current liabilities have risen, net current assets remain positive, suggesting short-term obligations can be met. Given the company’s limited scale, modest asset base, and recent decrease in net assets, credit approval should be conditional on updated management accounts showing stabilization or improvement in working capital and net asset position. Further scrutiny of cash flow generation is advised before extending significant credit facilities.

2. Financial Strength:
   The balance sheet reflects a micro-entity with minimal fixed assets (£838) and current assets (£5,086), offset by current liabilities of £2,315. The net current assets of £2,771 provide a reasonable working capital buffer. However, total net assets have decreased sharply from £5,741 to £1,609 year-over-year, driven by an increase in accruals/deferred income (£2,000). The company’s financial strength is weak but not critically impaired; the decline suggests either operational challenges or timing mismatches in income recognition. Equity remains positive, but the erosion warrants attention to avoid future solvency risk.

3. Cash Flow Assessment:
   While direct cash flow data is not provided, the reduction in current assets and increase in current liabilities and accruals imply potential pressure on liquidity. The company has only one employee and limited fixed assets, which may keep operating costs low. Positive net current assets indicate the firm can cover short-term liabilities; however, the significant drop in net current assets and net assets signals cash flow volatility. Monitoring actual cash inflows from receivables and timing of payments to creditors will be essential to confirm liquidity adequacy.

4. Monitoring Points:

• Quarterly management accounts with a focus on cash flow, receivables, and payables aging.
• Trends in accruals and deferred income to ensure revenue recognition aligns with cash collections.
• Net asset and working capital levels to detect further erosion or recovery.
• Any changes in director or ownership that could impact governance or financial strategy.