KM HOME IMPROVEMENTS LIMITED

Executive Summary

KM HOME IMPROVEMENTS LIMITED is a micro-entity start-up in the domestic building sector showing early profitability and positive net working capital. The company demonstrates sound compliance and governance with no overdue filings. Credit approval is recommended for modest facilities with continued monitoring of financial growth and liquidity as the business matures.

KM HOME IMPROVEMENTS LIMITED - Analysis Report

Company Number: 14904681

Analysis Date: 2025-07-20 16:28 UTC

1. Credit Opinion: APPROVE with reservations. KM HOME IMPROVEMENTS LIMITED is a newly incorporated private limited company (May 2023) operating in domestic building construction. The firm has reported a profitable first year with an operating profit of £18,021 and a net profit after tax of £14,598, indicating initial financial viability. The director and sole shareholder, Karl Makepeace, maintains full control and has filed all statutory returns on time with no overdue accounts, reflecting compliance and sound governance. However, the company is very young, with limited financial history and no fixed assets, which means the credit risk is moderate and further monitoring is advisable before extending larger credit facilities.

2. Financial Strength: The balance sheet shows total net assets of £8,785, all held as current assets (cash £7,785 and debtors £1,000). There are no fixed assets or stock reported. The company’s capital structure is minimal with £1 share capital and retained earnings of £8,784, reflecting the initial profit generation. The small net asset base and absence of tangible fixed assets limit collateral support for credit. The current asset base exceeds current liabilities by £8,785, indicating positive working capital but on a modest scale consistent with a micro-entity.

3. Cash Flow Assessment: Cash holdings of £7,785 provide reasonable immediate liquidity for a start-up at this stage. Debtors of £1,000 are low and manageable. There are no reported borrowings or creditor balances disclosed, suggesting limited external financing or outstanding payables. The positive net current assets indicate the company can meet short-term obligations currently. However, absence of past cash flow statements and short trading history means cash flow predictability is untested, warranting caution for credit beyond typical start-up levels.

4. Monitoring Points:

• Revenue and profit growth trajectory in subsequent years to confirm business sustainability and scaling ability.
• Timely payment of trade creditors and any new financing obligations to assess payment behavior.
• Development of fixed assets or inventory levels that might affect working capital needs.
• Director’s ongoing involvement and any changes in ownership or management structure.
• Industry risks in domestic building construction, especially sensitivity to economic cycles and local market demand.