KF CARPENTRY AND CONSTRUCTION LTD

Executive Summary

KF Carpentry and Construction Ltd is a small, recently established construction business with a positive short-term liquidity position but a heavily leveraged balance sheet and very limited equity. Credit approval is conditional, requiring ongoing financial monitoring due to increased long-term liabilities and thin capitalisation. The company’s ability to generate stable cash flow from trading will be critical to meeting debt obligations.

KF CARPENTRY AND CONSTRUCTION LTD - Analysis Report

Company Number: 14007723

Analysis Date: 2025-07-29 20:52 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   KF Carpentry and Construction Ltd is a recently incorporated micro-entity (March 2022) operating in roofing and construction activities. The company shows modest net assets and equity, which have diminished significantly from £4,273 in 2023 to £375 in 2024, primarily due to a substantial increase in long-term liabilities (£27,354 in 2024 vs. £2,309 in 2023). While current assets exceed current liabilities, indicating short-term liquidity, the sharp increase in creditors falling due after one year presents a leverage risk. Given the company's short trading history, small scale (one employee), and high gearing, credit approval should be conditional on further assurances such as personal guarantees or close monitoring of financial performance.

2. Financial Strength:

• Fixed assets increased to £18,466 in 2024 from £206 in 2023, suggesting investment in equipment or property supporting operations.
• Current assets rose from £30,706 to £70,015, improving working capital.
• Current liabilities nearly doubled to £60,752, but net current assets remain positive at £9,263.
• However, long-term liabilities ballooned to £27,354, heavily eroding net assets down to £375.
• The equity base is very thin, which limits the company’s buffer against losses or cash flow stress.
• The company is micro-sized with limited scale and capitalisation, making it vulnerable to adverse events.

3. Cash Flow Assessment:

• Positive net current assets indicate the company can cover short-term obligations.
• The increase in current assets (likely trade debtors and cash) versus current liabilities is encouraging for liquidity.
• The single employee and director (who is also the sole shareholder) means overheads may be low, supporting cash conservation.
• However, the sharp rise in long-term creditors suggests debt servicing demands will increase, requiring stable cash inflows from trading.
• No direct cash flow statement is provided, so reliance on balance sheet trends and business nature is necessary.

4. Monitoring Points:

• Track the evolution of long-term liabilities and ensure they are manageable relative to earnings.
• Monitor net asset position and equity to detect early signs of financial distress.
• Review turnover and profitability trends once available to assess operational viability.
• Confirm timely filing of accounts and confirmation statements to maintain compliance.
• Observe any changes in director’s conduct or additional borrowing.