MAKAZI HOMES LIMITED

Executive Summary

MAKAZI HOMES LIMITED is a newly established business exhibiting strong initial liquidity but very limited financial reserves, placing it in a fragile yet stable financial condition. The company should focus on building equity, managing creditor terms, and maintaining tight cash flow control to ensure sustainable growth and avoid liquidity distress. Careful operational and financial planning will be essential to improve the company’s financial health and resilience.

MAKAZI HOMES LIMITED - Analysis Report

Company Number: 15107843

Analysis Date: 2025-07-20 12:13 UTC

Financial Health Assessment of MAKAZI HOMES LIMITED

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1. Financial Health Score: C

Explanation:
MAKAZI HOMES LIMITED is in the very early stage of its business lifecycle, having been incorporated in August 2023 with its first financial year ended August 2024. The company shows a positive but very marginal net asset base (£1,011), with cash nearly equal to current liabilities, indicating a fragile financial position. The "C" grade reflects a start-up with fundamental solvency but limited financial buffer and operational history, requiring careful management to avoid symptoms of financial distress.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Cash at Bank	287,049	Healthy cash balance for a start-up, indicates good liquidity.
Current Liabilities	286,038	Very close to cash level, implying tight short-term liquidity.
Net Current Assets	1,011	Slightly positive working capital, indicating ability to meet short-term obligations but minimal buffer.
Net Assets	1,011	Low equity base, typical for a new company, but indicates limited financial cushion.
Shareholders Funds	1,011	Equity funded primarily by initial share capital and small retained profits.
Number of Employees	1	Small operational scale, typical for a micro or small company.
Corporation Tax Liability	8,189	Reflects taxable profits or timing differences, manageable but notable.

Vital Signs Interpretation:
The company has a "healthy cash flow" symptom at this stage, with a strong cash holding relative to liabilities, which is akin to a patient with stable heartbeat but low blood reserves — sufficient for now but vulnerable to any shocks. However, the net current assets and shareholders' funds are marginal, which signals limited financial resilience if unexpected expenses arise or revenues do not increase.

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3. Diagnosis

Underlying Business Health:

• MAKAZI HOMES LIMITED is a very young private limited company operating in diverse sectors including photographic activities, real estate letting and trading, and motion picture production.
• The company shows sound initial liquidity with cash nearly covering current liabilities, which is a positive "pulse" indicating no immediate liquidity distress.
• The minimal net assets and shareholders funds highlight the company is in the "neonatal" stage of financial development, relying heavily on initial capital injections rather than accumulated profits or asset base.
• The current liabilities include a significant sum categorized as "other creditors" (£277,669), which may represent loans, trade payables, or accrued expenses. Close scrutiny of creditor terms and repayment schedules is essential to avoid liquidity strain.
• The corporation tax liability indicates taxable profits or timing differences but is currently manageable.
• With only one employee (likely the director), operational costs should be contained, but growth and scaling will require careful cash management and possibly further capital raising.
• No signs of overdue filings or regulatory concerns, indicating good compliance health.

Symptoms of Concern:

• Very narrow working capital margin (net current assets at just £1,011) means any unexpected cash outflow could cause liquidity distress.
• Heavy reliance on a single shareholder/director creates risk concentration.
• Absence of fixed assets or tangible net worth limits borrowing capacity or collateral for credit facilities.

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4. Recommendations

To strengthen financial wellness, MAKAZI HOMES LIMITED should consider:

• Build a Larger Financial Cushion: Increase equity or reduce liabilities to improve net current assets and net assets. This can be achieved by injecting additional share capital or converting some short-term liabilities into longer-term debt.
• Improve Cash Flow Forecasting: Maintain rigorous cash flow monitoring to avoid liquidity "crises" symptoms. Given the close match between cash and liabilities, timing of payments and receipts is critical.
• Clarify and Manage Creditors: Review the nature of "other creditors" (£277,669) to negotiate better payment terms or convert to longer-term liabilities if possible. This reduces pressure on short-term liquidity.
• Diversify Revenue Streams: As activities span photography, real estate, and film production, ensure focus on profitable segments to build sustainable income and reduce risk exposure.
• Plan for Growth Prudently: Hiring additional staff or expanding operations should be aligned with financial capacity to avoid overextension.
• Maintain Compliance Discipline: Continue timely filing of accounts and confirmation statements to avoid penalties or regulatory issues.

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