MANDARIN MONKEY LTD

Executive Summary

Mandarin Monkey Ltd is currently financially distressed with negative net assets and severely insufficient working capital, indicating urgent liquidity and solvency challenges. Immediate actions focusing on cash flow management, cost reduction, and possible capital injection are critical to restore financial health and avoid insolvency risks.

MANDARIN MONKEY LTD - Analysis Report

Company Number: 13845755

Analysis Date: 2025-07-29 13:24 UTC

Financial Health Assessment for Mandarin Monkey Ltd

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1. Financial Health Score: D

Explanation:
Mandarin Monkey Ltd shows clear signs of financial distress, with negative net assets and worsening liquidity over the latest financial year. While the company is still operational and compliant with filing deadlines, its financial "vital signs" indicate a fragile condition requiring urgent attention.

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2. Key Vital Signs

Metric	2023 (£)	2024 (£)	Interpretation
Fixed Assets	2,198	1,649	Declining, indicating possible asset disposals or depreciation.
Current Assets	1,410	986	Decreasing cash or receivables, weakening short-term resources.
Current Liabilities	2,398	5,260	More than doubling, highlighting growing short-term debts.
Net Current Assets (Working Capital)	-988	-4,274	Negative and worsening, showing a cash flow "symptom of distress".
Total Assets Less Current Liabilities	1,210	-2,625	Shift from positive to negative, indicating solvency concerns.
Net Assets / Shareholders’ Funds	70	-4,005	Negative equity, reflecting accumulated losses or capital erosion.
Average Number of Employees	0	1	Slight operational expansion but financial stress prevails.

Interpretation:
The company’s liquidity is severely compromised with current liabilities more than five times current assets in 2024, signaling a potential inability to meet short-term obligations without additional financing. The net assets turning negative indicate that liabilities exceed assets, a critical concern analogous to a patient with organ failure symptoms.

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3. Diagnosis

Mandarin Monkey Ltd is exhibiting symptoms of financial distress. The company’s working capital deficit has significantly deepened within one year, and net liabilities have replaced net assets. This means the company owes more than it owns, placing pressure on its solvency and ability to operate sustainably. The reduction in fixed and current assets suggests either asset sales or reduced operational activity, but liabilities have increased sharply, implying reliance on creditor funding or unpaid obligations.

The company is still "active" and compliant with statutory filings, but its balance sheet reveals a "sick patient" in need of immediate intervention to avoid insolvency risks. The negative shareholders’ funds indicate an erosion of owner’s capital, which could deter investor confidence and limit access to external funding.

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4. Recommendations

To improve financial wellness and stabilize the company, the following actions are advised:

• Improve Liquidity:

  • Urgently assess and manage cash flows to increase current assets (cash or receivables).
  • Negotiate with creditors to extend payment terms or restructure short-term debts.
  • Consider short-term financing options (overdraft, invoice financing) cautiously.

• Cost Control and Efficiency:

  • Review operating expenses to eliminate non-essential costs and conserve cash.
  • Evaluate asset utilization and consider selling non-core or underperforming assets.

• Capital Infusion:

  • Directors and shareholders may need to inject fresh equity to restore positive net assets.
  • Explore external investors or grants aligned with the company’s education and software activities.

• Strategic Review:

  • Reassess business model and market positioning to drive revenue growth, especially given the company’s involvement in education, video production, and software publishing.
  • Enhance marketing and sales efforts to increase turnover.

• Financial Monitoring:

  • Implement regular financial health checks akin to medical monitoring to track improvement or deterioration.
  • Engage professional advice for turnaround planning if necessary.

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