Company Number: 14383536

Analysis Date: 2025-07-20 14:40 UTC

1. Risk Rating: MEDIUM
   Justification: KID KREATIONS GROUP LIMITED is a recently incorporated private limited company (since 2022) with a small but negative net working capital position as of its latest financial year ending June 2024. Although it has positive net assets and shareholders’ funds, its current liabilities exceed current assets by £6,684, indicating some liquidity pressure. The company is compliant with filing deadlines and does not show signs of insolvency or regulatory non-compliance at this stage.

2. Key Concerns:

• Liquidity Deficit: The company’s current liabilities (£60,096) exceed its current assets (£53,412), resulting in negative net current assets of (£6,684). This could indicate short-term cash flow challenges.
• Limited Operating History: Incorporated in late 2022, the company has less than two years of trading history, which restricts the ability to assess operational stability and earnings consistency.
• Modest Cash Reserves: Cash at bank stands at £13,713, a relatively low buffer against current liabilities, potentially increasing the risk of cash flow difficulties if receivables are delayed or expenses increase.

3. Positive Indicators:

• Compliance with Filing Requirements: Accounts and confirmation statement filings are up to date with no overdue filings noted, indicating good regulatory compliance and governance.
• Positive Net Assets and Shareholder Equity: Despite negative working capital, the company reports net assets of £6,212, reflecting some retained earnings and tangible fixed assets (£13,820) supporting the balance sheet.
• Increasing Employee Base: Growth in average employees from 3 to 8 within the year suggests business expansion and operational scaling.
• Diverse Business Activities: The company operates in combined office administrative services and specialised retail sale of games and toys, potentially providing diversified revenue streams.

4. Due Diligence Notes:

• Cash Flow Analysis: Review detailed cash flow statements and aging of debtors to assess the quality and timing of receivables, and confirm whether the negative working capital is transient or structural.
• Profit and Loss Details: The profit and loss account was not included; obtaining this information is essential to evaluate profitability trends and cost structure.
• Debt and Credit Terms: Investigate the nature of current liabilities and confirm whether any are overdue or subject to short payment terms that might exacerbate liquidity risk.
• Management and Ownership: Directors and PSCs appear stable and resident in the UK except one director residing in Hong Kong; assess if this has any operational impact or governance concerns.
• Market and Competitive Position: Given limited historical data, understanding market demand, competitive positioning, and client concentration is important for assessing business sustainability.