LKM44 LTD

Executive Summary

LKM44 Ltd is a micro-sized management consultancy with a modest but improving financial position. The company maintains a positive net asset base and has reduced short-term liabilities, but liquidity remains tight with minimal working capital. Conditional credit approval is recommended, subject to close monitoring of cash flow and receivables management.

LKM44 LTD - Analysis Report

Company Number: 14157509

Analysis Date: 2025-07-29 21:10 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   LKM44 Ltd is a young, micro-sized management consultancy with modest financial resources and limited operating history. The company shows positive net assets and a small but positive net working capital position, indicating minimal liquidity buffer. The recent reduction in debtors and creditors suggests improved cash collection and liability management. However, the company's limited scale, narrow asset base, and reliance on director loans as short-term financing highlight some vulnerability. Approval is recommended with conditions including regular review of cash flow performance and timely filing of accounts to ensure ongoing creditworthiness.

2. Financial Strength:
   The balance sheet reflects net assets of £3,854 as at 30 June 2024, up from £2,954 the prior year, demonstrating modest growth in equity. Fixed assets consist primarily of computer equipment (£3,658), evidencing investment in operational capacity. Current assets decreased significantly from £16,000 to £4,000, mainly due to a reduction in debtors, which may reflect improved collections or a contraction in sales. Current liabilities have likewise decreased from £15,676 to £3,804, indicating the company has reduced short-term obligations. Shareholders’ funds have increased due to retained profit accumulation. Overall, the financial position is stable but constrained by small scale and limited capital.

3. Cash Flow Assessment:
   Net current assets stand at £196, which is very narrow and signals tight liquidity. The company depends on director loans (£2,004) as part of current liabilities, which may be less stable than external financing. The drop in debtors from £16,000 to £4,000 could improve cash inflows but might also indicate reduced sales volume. With only one employee (the director) and limited operational scope, cash flows are likely predictable but thin. The small working capital buffer necessitates careful monitoring of receivables and payables to avoid liquidity stress.

4. Monitoring Points:

• Debtor days and collection efficiency to ensure receivables remain manageable.
• Director loan account movements and repayment plans to assess reliance on internal funding.
• Timely filing of next accounts and confirmation statement to maintain regulatory compliance.
• Profitability trends and cash flow generation to track business viability and growth.
• Any material changes in creditors or liabilities that could signal cash flow difficulties.