KM DESIGN STUDIO LTD

Executive Summary

KM DESIGN STUDIO LTD remains compliant with filing requirements and shows modest net assets despite a recent loss and reduced turnover. The company’s small scale, declining revenue, and limited asset base present moderate solvency and liquidity risks. Further examination of cash flow, prepayments, and operational strategy is recommended to assess sustainability.

KM DESIGN STUDIO LTD - Analysis Report

Company Number: 14157059

Analysis Date: 2025-07-29 20:51 UTC

1. Risk Rating: MEDIUM
   The company is active with current filings up to date and no overdue accounts or confirmation statements. However, the financial performance shows a recent loss and declining turnover, with limited asset base and modest net assets. These factors suggest moderate risk regarding ongoing financial stability and operational sustainability.

2. Key Concerns:

• Declining Revenue and Profitability: Turnover dropped from £27,826 to £12,200 in the latest year with a small loss of £148 recorded, signaling potential operational difficulties or reduced demand.
• Limited Asset Base and Cash Reserves: Fixed assets are zero, and current assets decreased from £10,324 to £7,175, although net current assets increased due to reduced liabilities and recognition of prepayments. Cash specifics for the latest year are not separately detailed, which limits clarity on liquidity.
• Reliance on Director and Small Scale Operations: The company has only one employee (likely the director), which may constrain capacity and operational resilience. Also, the micro-entity status implies minimal disclosure and limited financial history to fully assess risk.

3. Positive Indicators:

• Compliance and Filing Diligence: No overdue filings or penalties reported; next accounts and confirmation statements are scheduled appropriately.
• Improved Net Assets: Net assets improved from £2,331 to £9,745 despite the loss, partly due to recognition of prepayments (£9,165) and reduced liabilities.
• No Indications of Financial Distress: The company is not in liquidation or administration and maintains positive net current assets and shareholders' funds.

4. Due Diligence Notes:

• Clarify the nature and timing of the significant prepayments (£9,165) reported at year-end and assess their recoverability and impact on cash flow.
• Review cash flow statements or bank balances to confirm liquidity position, as cash detail is absent for the latest year.
• Investigate the cause of turnover decline and loss, including client retention, market conditions, and cost management.
• Confirm director’s plans for business growth or restructuring to restore profitability and stabilize financial performance.