Company Number: 12428051

Analysis Date: 2025-07-20 18:44 UTC

1. Risk Rating: HIGH
   The company exhibits a significant deterioration in financial position over the latest year, with net current liabilities and a dramatic decline in net assets, indicating elevated solvency and liquidity risks.

2. Key Concerns:

• Negative Working Capital: The company reported net current liabilities of £677 at the end of 2023, a decline from net current assets of £34,338 in 2022, signaling potential liquidity issues.
• Severe Erosion of Net Assets: Net assets fell sharply from £27,981 in 2022 to just £420 in 2023, suggesting losses have severely depleted equity and may impair the company’s ability to absorb future shocks.
• Increasing Long-Term Debt: Creditors due after more than one year (bank loans) remain substantial at £15,386 (£25,264 in 2022) amidst declining overall financial strength, raising concerns about debt servicing capacity.

3. Positive Indicators:

• Adequate Cash Reserves: Despite the liquidity concerns, the company held £43,681 in cash at year-end 2023, which may provide some short-term relief for operational needs.
• Consistent Employment Level: The average number of employees remained stable at 7, indicating operational continuity.
• Timely Compliance: The company has filed accounts and confirmation statements on time with no overdue filings, reflecting good regulatory compliance.

4. Due Diligence Notes:

• Investigate the cause of the sharp decline in net assets and working capital between 2022 and 2023, including any one-off charges, operational losses, or impairments.
• Review the terms and repayment schedule of the bank loans, particularly the maturity profile and any covenants that may impact financial stability.
• Examine the composition and reason for the substantial increase in "Other creditors" within current liabilities (from £68 in 2022 to £20,092 in 2023), which could indicate accrued expenses or payment delays.
• Assess the trading performance and cash flow generation in 2023 and current year to determine if the business model remains sustainable.
• Confirm whether there are any contingent liabilities or risks not disclosed in the filleted accounts due to small company exemptions.

Executive Summary:
ONLY 1 KASHMIR LTD’s financial position has deteriorated markedly in the latest year, with net current liabilities and near depletion of net assets pointing to heightened solvency and liquidity risks. While the company maintains regulatory compliance and some cash reserves, the significant erosion of equity and elevated debt levels raise concerns about its operational sustainability without remedial actions. Further investigation into the specific causes of financial decline and debt servicing capacity is warranted to fully assess risk exposure.