MACKINNON SHELLFISH LTD

Executive Summary

MACKINNON SHELLFISH LTD demonstrates solid asset growth and increasing net worth, reflecting a generally healthy financial condition for a young micro-entity in marine fishing. However, persistent negative working capital indicates some liquidity pressure which needs active management to ensure operational stability. With improved cash flow management and possible capital support, the company is well positioned for sustainable growth.

MACKINNON SHELLFISH LTD - Analysis Report

Company Number: SC687975

Analysis Date: 2025-07-29 14:36 UTC

Financial Health Assessment for MACKINNON SHELLFISH LTD

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1. Financial Health Score: B

Explanation:
The company shows a solid and improving financial position for a micro-entity engaged in marine fishing. Its net assets have grown significantly, indicating strengthened equity and capital base. However, the current liabilities consistently exceed current assets, resulting in negative net current assets (working capital), which is a symptom of liquidity pressure. The overall health is good but with caution advised on short-term liquidity management.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	73,771	Healthy investment in long-term assets; increased from prior years, showing capital growth.
Current Assets	26,703	Relatively stable short-term assets, mostly cash or receivables.
Current Liabilities	37,528	Current debts exceed current assets, a warning sign for liquidity strain.
Net Current Assets (Working Capital)	-10,825	Negative working capital indicates potential difficulties in meeting short-term obligations promptly.
Total Net Assets (Equity)	62,946	Strong equity base, increased from £45,591 in 2023, indicating retained earnings or capital injection.
Share Capital	100	Minimal share capital, typical for micro-entities; equity growth mostly from retained profits.
Average Employees	1	Extremely lean operation; low personnel overhead but potentially vulnerable to key-person risk.

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3. Diagnosis: What the Financial Data Reveals

• Strengths ("Healthy Heartbeat"):
  The company’s fixed assets have grown from £42k in 2021 to nearly £74k in 2024, indicating investment in equipment or vessels necessary for marine fishing operations. The net asset position has improved markedly, showing the business is increasing its net worth and value to shareholders. This is a positive sign of profitability or capital contribution over time.

• Symptoms of Distress:
  The persistent negative net current assets (working capital) is a red flag. It suggests the company may be relying on external financing, delayed payments, or other short-term funding to cover immediate liabilities. While not immediately critical, this "liquidity symptom" could affect operational flexibility, supplier relationships, or creditworthiness if not addressed.

• Operational Considerations:
  With only one employee on average, the company operates with minimal overhead but may face risks related to capacity or continuity if that key individual is unavailable. This lean setup may also limit scalability or resilience.

• Compliance and Governance:
  The company is current with filings and not overdue, which reflects good administrative health and regulatory compliance.

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4. Recommendations: Improving Financial Wellness

• Improve Working Capital Management:
  Aim to better align current assets and liabilities. Strategies include negotiating longer payment terms with suppliers, accelerating receivables collection, or increasing cash reserves. This will ease liquidity pressure and reduce the risk of short-term cash shortages.

• Monitor Cash Flow Closely:
  Regular cash flow forecasting and scenario planning will help anticipate any funding gaps and manage expenses proactively.

• Consider Capital Injection or Credit Facilities:
  If working capital issues persist, seek additional funding sources such as short-term loans or increased equity investment to provide a buffer.

• Diversify Operational Capacity:
  Explore hiring additional staff or cross-training to reduce reliance on a single individual, improving operational resilience.

• Maintain Regulatory Compliance:
  Continue timely filing of accounts and returns to avoid penalties and maintain good standing.

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