Company Number: 14192111

Analysis Date: 2025-07-20 18:07 UTC

1. Credit Opinion: DECLINE
   Kima Restaurant Ltd presents significant credit risk due to persistent and increasing negative net assets and net current liabilities over the past two years. The company’s balance sheet shows a worsening working capital deficit and overall net liabilities, indicating an inability to meet short-term obligations from current assets. The micro-entity status and short operating history (incorporated mid-2022) provide limited financial track record, and the growing current liabilities (£399k in 2024 vs £219k in 2023) raise concerns about liquidity management. Without evidence of profitability or positive cash flow, extending credit facilities would be speculative and high risk.

2. Financial Strength:
   The company’s financial position is weak. Fixed assets increased modestly (£97k to £156k), but current liabilities have nearly doubled, causing net current assets to deteriorate from -£197k in 2023 to -£304k in 2024. The net liabilities have increased to nearly -£150k, reflecting accumulated losses and possible funding from creditors or loans. Shareholders’ funds are negative, indicating erosion of equity and potential insolvency risk if losses continue. The balance sheet does not indicate sufficient capital buffer or reserves.

3. Cash Flow Assessment:
   Current assets (£95k) are insufficient to cover current liabilities (£399k), resulting in a large working capital deficit. This implies liquidity constraints and potential difficulty in meeting short-term debts as they fall due. The lack of cash flow statements limits detailed analysis, but the balance sheet suggests operating cash shortfalls or reliance on external financing. The increase in liabilities without corresponding asset growth signals possible cash flow stress.

4. Monitoring Points:

• Monitor monthly cash flow and working capital trends closely to detect liquidity tightening.
• Review creditor payment terms and any overdue payables for signs of deteriorating supplier relationships.
• Track any improvements in sales or profitability to assess turnaround prospects.
• Assess changes in director or shareholder funding support or external financing arrangements.
• Watch for late filings or regulatory actions as indicators of operational difficulties.