WKD LABS LTD

Executive Summary

WKD Labs Ltd is currently financially distressed, with negative equity and poor liquidity, indicating an inability to meet current liabilities without additional funding. The company’s declining working capital and low cash reserves suggest high credit risk. Without a significant turnaround or external support, extending credit is not advisable at this time.

WKD LABS LTD - Analysis Report

Company Number: 14355005

Analysis Date: 2025-07-29 18:13 UTC

Credit Opinion:
DECLINE. WKD Labs Ltd demonstrates weak financial health with a negative net asset position and persistent net current liabilities that have worsened over the past year. The company exhibits poor liquidity, with current assets significantly lower than current liabilities and minimal cash reserves, indicating a limited ability to meet short-term obligations. The absence of profitability and negative retained earnings further undermine repayment capacity. Given these factors and the single director being the owner with no external shareholders, the business appears high risk for extending credit without substantial mitigating factors.

Financial Strength:
The balance sheet reveals deteriorating financial strength. As of 30 September 2024, shareholders’ funds stand at a deficit of £1,744, down from positive £535 in the previous year. Net current liabilities increased from £2,087 to £3,610, reflecting worsening working capital. Fixed assets declined slightly but remain above £1,900. The overall total assets less current liabilities shifted from a positive £535 to a negative £1,644. This negative equity and working capital deficit indicate the company is highly leveraged and undercapitalized.

Cash Flow Assessment:
Liquidity is extremely constrained. Cash at bank dropped marginally from £136 to £123, an insufficient buffer against current liabilities of over £4,100. Debtors have sharply decreased from £2,190 to £424, possibly indicating declining sales or difficulties in collecting receivables. The director’s advances show a net repayment balance in 2024, but reliance on director funding is evident and may not be sustainable. Overall, the company lacks adequate liquid resources to comfortably cover near-term obligations, posing a risk of payment delays or default.

Monitoring Points:

• Net Current Assets and working capital trends: Watch for improvement or further deterioration.
• Cash balances and debtor collection efficiency: Monitor for signs of liquidity stress or improvement.
• Profitability and retained earnings: Future filings should show a return to positive results to rebuild equity.
• Director advances and related party transactions: Assess ongoing financial support and potential risks.
• Timely submission of accounts and returns: Maintain compliance to avoid regulatory complications.