KK GANATRA LTD

Executive Summary

KK GANATRA LTD owns significant real estate assets but exhibits high leverage and weak liquidity, resulting in a fragile financial position. The company’s ability to service debt depends heavily on asset values and forthcoming operational cash flows. Credit approval is recommended only with strong collateral and close monitoring of liquidity metrics and debt covenants.

KK GANATRA LTD - Analysis Report

Company Number: 13290457

Analysis Date: 2025-07-29 14:54 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   KK GANATRA LTD demonstrates ownership of significant tangible fixed assets (£871,600 as of 31 March 2024), primarily in real estate, which supports asset-backed lending. However, the company’s current liabilities are very high (£834,726 due after one year plus £21,942 due within one year), resulting in negative net current assets (-£20,882) and very modest net assets (£15,992). The company has a small equity base and limited liquidity (cash only £1,060). The business appears to be in early growth stages (incorporated in 2021) and has no employees, relying on management consultancy from the director. Given the high gearing and tight liquidity, credit exposure should be limited or accompanied by strong covenants and asset security. Approval is conditional on satisfactory collateral coverage and monitoring of debt servicing ability.

2. Financial Strength:
   The balance sheet is heavily leveraged with more than £850k in fixed and investment properties offset by over £834k in long-term liabilities. The company’s net assets have increased slightly from £11,515 in 2023 to £15,992 in 2024, reflecting some retained earnings growth. The asset base is mostly illiquid property assets, with very low current assets and cash balances. The equity buffer is minimal relative to total borrowings, indicating financial vulnerability if asset values decline or income generation falters.

3. Cash Flow Assessment:
   Liquidity is weak with cash reserves dropping substantially from £31,843 in 2023 to £1,060 in 2024. Net current liabilities indicate working capital deficits which could impair the company’s ability to meet short-term obligations without refinancing or additional capital injections. The absence of trade debtors and employees suggests limited operating activity or outsourcing. Cash flow management and timely servicing of short-term debts will be crucial to avoid covenant breaches or liquidity crises.

4. Monitoring Points:

• Track changes in cash balances and working capital closely to ensure no deterioration in liquidity.
• Monitor loan covenant compliance and any restructuring of long-term debt.
• Watch for changes in property valuations that impact fixed asset carrying values and collateral quality.
• Review turnover and profitability once reported to assess operational cash generation.
• Keep an eye on director and shareholder capital contributions or withdrawals, as equity levels are minimal.