KNIGHTS ENGINEERING & FABRICATION LTD

Executive Summary

Knights Engineering & Fabrication Ltd is a newly incorporated micro-entity with negative net assets and a working capital deficit, indicating high solvency risk at this early stage. The company is currently compliant with filing requirements but remains dependent on the director’s financial support to continue operations. Close monitoring of cash flow and operational progress is recommended to assess future sustainability.

KNIGHTS ENGINEERING & FABRICATION LTD - Analysis Report

Company Number: 15077473

Analysis Date: 2025-07-20 14:48 UTC

1. Risk Rating: HIGH
   The company shows negative net assets and net current liabilities as of its first financial year end, indicating immediate solvency concerns. The micro-entity filing shows a capital and reserves deficit of £953 with current liabilities exceeding current assets by the same amount, suggesting an inability to meet short-term obligations without additional funding.

2. Key Concerns:

• Negative Net Assets and Working Capital Deficit: The company’s current liabilities (£2,980) exceed its current assets (£2,027), resulting in net current liabilities of £953 and a negative shareholders' funds position. This is a clear solvency risk indicator.
• Dependence on Director Support: The accounts state the going concern assumption relies heavily on the director’s continued financial support. This dependency can be a risk if the director’s circumstances change or support is withdrawn.
• Limited Operating History and Scale: Incorporated in August 2023 with only one employee and micro-entity status, there is minimal operational history and scale to assess sustainability. Early-stage companies often face cash flow volatility and operational risks.

3. Positive Indicators:

• Current Compliance with Filing Requirements: Both accounts and confirmation statements are filed on time with no overdue filings, indicating good regulatory compliance and governance discipline so far.
• Sole Director and PSC Alignment: The director and sole person with significant control is the same individual, which can facilitate swift decision-making and operational control in a small business context.
• Clear Industry Classification: The company operates in fabrication and vehicle maintenance sectors, which are established markets, potentially offering steady demand for services.

4. Due Diligence Notes:

• Review Detailed Cash Flow Forecasts: Investigate the company’s ability to generate positive cash flow or secure additional financing to cover the net current liability position.
• Examine Director’s Capacity for Financial Support: Assess the director’s financial position and willingness to continue supporting the business to validate the going concern assumption.
• Monitor Business Development Progress: Track contracts, turnover growth, and operational milestones as the company matures beyond its initial start-up phase.
• Verify No Hidden Liabilities or Contingent Risks: Review notes and disclosures for any off-balance sheet risks or contingent liabilities not apparent in the summary financials.