CARTERS MK LTD

Executive Summary

Carters MK Ltd is a micro-entity in the vehicle maintenance sector operating with negative equity and significant working capital deficiencies. The company relies heavily on director loans to support liquidity, raising substantial credit risk concerns. Given the persistent losses and weak balance sheet, credit extension is not recommended at this stage without significant financial restructuring or capital infusion.

CARTERS MK LTD - Analysis Report

Company Number: 14436926

Analysis Date: 2025-07-29 20:20 UTC

1. Credit Opinion: DECLINE
   CARTERS MK LTD shows persistent net liabilities and negative net current assets over the last two years, indicating an inability to cover short-term liabilities with current assets. The company’s ongoing reliance on director loans (unsecured and interest-free) to meet obligations suggests weak liquidity and financial distress. Despite being active in a relatively stable industry (vehicle maintenance and repair), the company’s financial position and negative equity imply a high risk of default on any new credit facilities.

2. Financial Strength:
   The balance sheet shows net liabilities of £456 as of 31 October 2024, an improvement from £724 the previous year, but still negative. Fixed assets have decreased from £8,898 to £5,976, possibly indicating asset disposals or depreciation without reinvestment. Current liabilities exceed current assets by £6,432, highlighting working capital deficiency. Shareholders’ funds remain negative, reflecting accumulated losses and insufficient capital base to absorb further shocks.

3. Cash Flow Assessment:
   Current assets of £3,141 against current liabilities of £9,573 indicate strained liquidity. The company depends on director advances (£8,574 owed to director) to fund operations, signaling inadequate internal cash generation or external funding. The unsecured, interest-free director loan is repayable on demand, adding uncertainty to cash flow stability. No audit was performed, so underlying cash flow details are limited, but the working capital deficit is a red flag.

4. Monitoring Points:

• Improvement or further deterioration in net current assets and overall net liabilities.
• Changes in director loan balances and repayment activity, as this loan supports liquidity.
• Evidence of positive operating cash flows or new equity injections to strengthen financial position.
• Filing of next accounts and confirmation statements on time to ensure compliance and transparency.
• Any material change in business operations or market conditions affecting revenue generation.