MAKALANDA MANAGEMENT GROUP LLP

Executive Summary

MAKALANDA MANAGEMENT GROUP LLP has a robust fixed asset foundation but faces significant liquidity challenges due to minimal current assets and high liabilities. The company's financial health is fragile, with symptoms of cash flow stress and heavy debt leverage. Immediate focus on improving short-term liquidity and managing debt is essential to stabilize and enhance long-term financial wellness.

MAKALANDA MANAGEMENT GROUP LLP - Analysis Report

Company Number: OC433950

Analysis Date: 2025-07-29 19:51 UTC

Financial Health Assessment: MAKALANDA MANAGEMENT GROUP LLP

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1. Financial Health Score: C

Explanation:
The company shows a stable but constrained financial position. It holds significant fixed assets, which suggests investment in long-term resources, but has minimal liquid assets (current assets) and very high long-term liabilities relative to its working capital. This situation reflects a business with restricted cash flow flexibility and potential liquidity stress, warranting close monitoring.

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2. Key Vital Signs:

Metric	Value (2024)	Interpretation
Fixed Assets	£1,737,000	Healthy investment in long-term assets.
Current Assets	£5,514	Very low liquid assets; limited short-term liquidity.
Current Liabilities	£1,312,000	Extremely high obligations due within one year.
Net Current Assets (Working Capital)	£5,514	Positive but negligible; indicates tight short-term finances.
Total Assets Less Current Liabilities	£1,742,514	Asset base after short-term debts; stable but overshadowed by liabilities.
Creditors (Due after >1 yr)	£1,312,000	Large long-term debt burden.
Members' Loans	£427,089	Substantial loans from members, indicating possible internal funding reliance.

Interpretation of Vital Signs:

• Fixed Assets: The company has a solid asset base, likely property or equipment, indicating investment in its operational capacity or capital projects.
• Current Assets vs. Liabilities: The liquid assets are insufficient relative to current liabilities, which can be a symptom of cash flow stress or limited operational liquidity — akin to a patient with strong bones but weak circulation.
• High Long-term Debt: The large creditor figure suggests the company carries significant debt, which could be a burden on future earnings if not properly managed.
• Members’ Loans: A notable amount of funding is sourced internally, which may reflect either confidence in the business or a reliance on members to sustain liquidity.

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3. Diagnosis:

MAKALANDA MANAGEMENT GROUP LLP's financial profile reveals a company with a strong fixed asset base but limited working capital. The low current assets juxtaposed with very high current liabilities signal liquidity constraints, a classic symptom of financial distress in the short term. The large creditor balances, both current and long-term, suggest the company is highly leveraged, potentially increasing financial risk.

However, the company is not yet in liquidation or administration, and it has filed accounts on time, indicating operational compliance and no immediate legal distress. The reliance on members’ loans points to internal support, but this could mask underlying cash flow issues.

Overall, the company exhibits a fragile financial health condition: solid in assets but weak in cash flow and liquidity. This profile demands careful cash management and debt restructuring to avoid future complications.

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4. Recommendations:

• Improve Liquidity:
  Focus on increasing current assets, particularly cash or equivalents, to build a buffer against short-term liabilities. This could involve accelerating debtor collections, reducing stock levels, or renegotiating payment terms with suppliers.

• Debt Management:
  Explore refinancing options to reduce the burden of the large current and long-term liabilities. Negotiating longer terms or lower interest rates on debt could relieve financial pressure.

• Cash Flow Monitoring:
  Implement rigorous cash flow forecasting and controls to anticipate liquidity bottlenecks early. Consider contingency plans for unexpected cash shortfalls.

• Capital Structure Review:
  Assess the balance between equity and debt. Given the significant loans from members, consider formalizing or restructuring these to improve transparency and possibly convert some debt to equity if appropriate.

• Operational Efficiency:
  Examine operational expenses and identify cost-saving measures to improve net income and free cash flow.

• Stakeholder Communication:
  Maintain transparent communication with members and creditors about financial health and plans, fostering trust and cooperation.

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