HM MOBILE AUTO MECHANICAL LIMITED

Executive Summary

HM MOBILE AUTO MECHANICAL LIMITED is a newly established micro-entity exhibiting early financial distress signs, including negative net assets and working capital, indicating liquidity challenges. Immediate capital infusion, careful cost management, and a focus on starting revenue-generating operations are critical to reversing this trend and achieving financial stability. Prompt action will improve the company's financial prognosis and help establish a healthy cash flow foundation.

HM MOBILE AUTO MECHANICAL LIMITED - Analysis Report

Company Number: 15111568

Analysis Date: 2025-07-20 11:22 UTC

Financial Health Assessment Report for HM MOBILE AUTO MECHANICAL LIMITED

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1. Financial Health Score: Grade D

Explanation:
The company shows significant signs of financial distress as evidenced by negative net current assets (working capital) and net liabilities. Although it is a very young micro-entity with minimal operations and no employees yet, the current financial snapshot reveals a fragile financial state. The score D reflects concerning liquidity and capital structure that require immediate attention to avoid further deterioration.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	36	Extremely low, indicating little available cash or short-term assets.
Current Liabilities	300	Liabilities due within one year exceed current assets significantly.
Net Current Assets (Working Capital)	-264	Negative working capital, a key symptom of liquidity distress.
Total Assets Less Current Liabilities	-264	Reflects total net liabilities, signaling financial weakness.
Net Assets (Shareholders' Funds)	-264	Negative equity; company owes more than it owns.
Employee Count	0	No staff employed; company likely in startup phase or dormant operationally.

Interpretation of Vital Signs:

• The "healthy cash flow" equivalent is absent here; the company has very limited current assets (£36), while its immediate obligations (£300) outstrip these assets by a large margin. This is analogous to a patient with dangerously low blood pressure—insufficient liquidity to meet short-term debts.
• Negative net assets indicate the company’s capital base is in deficit, akin to a patient showing signs of malnutrition—an unhealthy capital structure.
• Zero employees suggest that operations are not yet fully underway, meaning revenue generation might be minimal or absent.

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3. Diagnosis

Underlying Financial Health:
HM MOBILE AUTO MECHANICAL LIMITED is at an early stage of its lifecycle, incorporated only in September 2023. The company’s micro-entity status and absence of employees indicate it is likely still in setup or pre-revenue phase. However, the financial "symptoms"—negative net current assets and shareholders' funds—suggest the company is currently undercapitalized and facing liquidity challenges.

This condition is similar to a patient in a critical early stage of illness where vital signs indicate distress but treatment options remain viable if addressed promptly. The negative net assets imply that either initial funding was insufficient or early expenses have outpaced any income or investment.

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4. Recommendations

To improve financial wellness and move towards a healthier financial state, the following actions are advised:

• Inject Additional Capital: As the company currently shows negative equity, immediate capital injection from the owner or external investors is essential to stabilize the balance sheet and cover short-term liabilities.

• Cash Flow Management: Implement strict control over expenditures to prevent cash burn and optimize any incoming cash flow. This will help improve liquidity and reduce the risk of insolvency.

• Operational Commencement: Begin revenue-generating activities promptly to create positive cash inflows. Developing a clear business plan with sales forecasts and cost controls will be critical.

• Regular Financial Monitoring: Establish monthly financial "check-ups" to monitor liquidity, expenses, and progress toward profitability, enabling timely interventions before distress worsens.

• Explore Financing Options: Consider short-term financing or credit facilities to bridge liquidity gaps while the business ramps up operations.

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