Company Number: 13010452

Analysis Date: 2025-07-20 14:29 UTC

1. Risk Rating: MEDIUM

Justification: KM Change Consulting Limited is an active private limited company operating in management consultancy since 2020. The most recent financials (year ending 30 Nov 2024) show a significant deterioration in net assets and liquidity compared to prior years, with net assets falling from £38,311 in 2023 to £7,431 in 2024 and net current assets dropping sharply from £32,762 to £2,613. The company maintains ongoing finance lease obligations which contribute to its liabilities. While there is no indication of overdue filings or regulatory non-compliance, the financial trends indicate increased solvency and liquidity risks.

2. Key Concerns:

• Declining Net Assets and Working Capital: Net assets have decreased by over 80% year-on-year, and net current assets are marginally positive, indicating tight liquidity that could impair the company’s ability to meet short-term obligations.
• High Finance Lease Obligations: The company carries significant finance lease liabilities (£24,945 total, with £5,645 due within one year), which may constrain cash flow and increase financial risk.
• Rising Current Liabilities (Tax and VAT): Corporation tax and VAT liabilities have increased notably (£33,643 and £15,233 respectively), suggesting potential cash flow pressures or delayed payments to HMRC.

3. Positive Indicators:

• Timely Filings and Compliance: Accounts and confirmation statements are current with no overdue filings, indicating sound regulatory compliance.
• Single Director with Relevant Expertise: The sole director is a management consultant, aligned with the company’s activity, suggesting operational focus.
• Modest Share Capital and Small Size: The company is small with minimal share capital (£1), limiting exposure and complexity.

4. Due Diligence Notes:

• Investigate causes for the sharp decline in net assets and working capital in the 2024 financial year—whether due to operational losses, asset write-downs, or increased liabilities.
• Review the nature and terms of the finance lease obligations to assess refinancing or repayment risks.
• Examine cash flow statements and management accounts for recent periods to verify liquidity trends and tax payment status.
• Confirm the sustainability of the business model and client pipeline given financial deterioration.
• Clarify any off-balance sheet liabilities or contingent risks not disclosed in the accounts.