Company Number: 14761814

Analysis Date: 2025-07-19 12:21 UTC

1. Credit Opinion: DECLINE. Koshance Limited is a newly incorporated micro private limited company with a negative net asset position of £265,509 as at 31 December 2023. The financials reveal significant net current liabilities (£905,228), indicating liquidity distress. The company’s current financial structure and working capital position do not support external credit extension. Without evidence of profitable operations or cash flow generation, the ability to service debt or meet commercial obligations is highly uncertain. Furthermore, the company is engaged in activities of a holding company, which typically relies on underlying subsidiaries for cash flow, none of which are disclosed here.

2. Financial Strength: The balance sheet shows fixed assets of £639,719, offset by current liabilities of £255,736 and negative current assets of £649,492, leading to net current liabilities of £905,228. The negative shareholders’ funds indicate accumulated losses or financing gaps. The minimal share capital (£2) further limits equity buffer. The large negative working capital suggests the company is either over-leveraged or has significant short-term liabilities not matched by liquid assets. This financial structure is weak and exposes the company to solvency risk without external capital injection or operational turnaround.

3. Cash Flow Assessment: The company’s current assets being negative implies cash or receivables are insufficient against short-term obligations. Given the micro entity exemption and absence of detailed cash flow statements, it is difficult to assess operational cash generation. However, the large net current liabilities and negative net assets strongly suggest cash flow constraints. The directors note that a loan will not be called within 12 months, implying dependency on external funding. Overall, liquidity risk is elevated and working capital management appears poor.

4. Monitoring Points:

• Monitor subsequent filing of accounts to track changes in net assets and working capital.
• Watch for improvements in current asset position and reduction of current liabilities.
• Review any related party transactions or loans that support liquidity.
• Track director changes and their impact on management quality.
• Assess if the company acquires profitable subsidiaries or generates operating cash flow.