KLOUDDAP SOLUTIONS LTD

Executive Summary

Klouddap Solutions Ltd’s financials reveal a significant deterioration in liquidity and net asset position over the last year, resulting in negative equity and working capital deficits. The company’s micro entity size, minimal staff, and reliance on director loans increase credit risk. Without evidence of improved cash flow or operational turnaround, extending credit is not recommended at this time.

KLOUDDAP SOLUTIONS LTD - Analysis Report

Company Number: 13217561

Analysis Date: 2025-07-29 19:28 UTC

1. Credit Opinion: DECLINE
   Klouddap Solutions Ltd shows a marked deterioration in financial position over the latest reported year. The company moved from a positive net current asset position of £59,411 in March 2022 to a significant net current liability of £65,588 in March 2023, resulting in negative net assets of the same amount. This indicates liquidity stress and an inability to meet short-term obligations without additional funding. The negative equity base and working capital deficit present high credit risk. The company’s micro entity size and low employee count (1 employee) further limit operational scale and resilience. No indication of profitability or cash flow generation is provided, and reliance on director loans signals weak financial independence. Given these factors, extending credit without substantial security or guarantees is inadvisable.

2. Financial Strength:
   The balance sheet displays substantial weakness. Current assets plummeted from £125,145 to £11,359 year-on-year while current liabilities increased from £65,734 to £76,947, causing net current liabilities of £65,588. Net assets mirror this deficit, showing shareholders' funds are negative by the same figure. The company’s share capital is nominal (£1.00), and accumulated losses or capital erosion are evident. The director loan balance of £11,079 remains on the books but was reported as cleared shortly after year-end via dividend distribution, which may have further impaired liquidity. Overall, the financial position is fragile, with insufficient asset coverage against liabilities and no buffer for operational or financial shocks.

3. Cash Flow Assessment:
   Although detailed cash flow statements are not provided, the sharp decline in current assets coupled with rising current liabilities suggests cash flow constraints. The company’s working capital deficit indicates that short-term liabilities exceed liquid assets, creating potential payment delays or defaults without external funding. The business employs only 1 person, limiting operational capacity but also expense base. The director loan presence and subsequent dividend repayment imply reliance on insider funding rather than operational cash generation. Overall liquidity appears strained, raising concerns about ongoing operational viability and ability to service any credit facilities.

4. Monitoring Points:

• Quarterly monitoring of liquidity ratios (current ratio and quick ratio) to detect improvements or further deterioration in working capital.
• Review of any updated management accounts or cash flow forecasts to assess real-time financial health and funding needs.
• Confirmation of dividend declarations and director loan repayments, as these affect cash reserves and creditor protection.
• Monitoring of business activity level and client base growth in the IT consultancy sector to evaluate revenue trajectory.
• Directors’ conduct and further financial filings to watch for any signs of financial distress or regulatory issues.