Company Number: 13591534

Analysis Date: 2025-07-19 12:33 UTC

1. Credit Opinion: DECLINE

Khaana Ltd demonstrates a weak financial position with net liabilities of £12,669 as at 31 August 2023. The negative net current assets of £14,809 indicate poor short-term liquidity, and the company is unable to cover its current liabilities with its current assets. The significant long-term creditors (£42,689) further strain the balance sheet. Given the company is relatively new (incorporated 2021), the absence of positive retained earnings or equity buffer is concerning. The micro-entity filing status limits detailed financial disclosures, but the available data points to financial distress. Therefore, the company is unlikely to reliably service additional credit without substantial improvement or guarantees.

2. Financial Strength:

• Fixed assets of £45,951 provide some tangible asset coverage but are outweighed by liabilities.
• Current assets stand very low at £165, insufficient to meet current liabilities of £42,689.
• Negative working capital (net current assets: -£14,809) highlights liquidity problems.
• Total creditors including amounts falling due after more than one year amount to £42,689 plus accruals of £1,122.
• Shareholders’ funds are negative (£-12,669), reflecting accumulated losses or capital erosion.
• The company’s equity base is inadequate to absorb financial shocks or sustain business operations without external support.

3. Cash Flow Assessment:

• The minimal current assets and large current liabilities imply tight or negative cash flow.
• The company’s ability to meet short-term obligations is strained, risking payment delays or defaults.
• No positive working capital cushion exists to manage cash fluctuations.
• The reduction in average employees from 4 to 3 may be a cost-cutting response to financial pressure.
• Lack of audit and micro-entity filing reduces transparency on cash flow from operations, but available data suggests liquidity constraints.

4. Monitoring Points:

• Monitor quarterly cash flow statements and bank account balances to detect liquidity improvements or deterioration.
• Watch for changes in creditors’ terms or restructuring of long-term liabilities.
• Track any equity injections or capital restructuring that may strengthen the balance sheet.
• Review director and PSC actions for indications of financial distress management or external funding.
• Keep abreast of payment patterns to suppliers and HMRC to pre-empt any defaults or insolvency risks.