MANIC CUSTOMS LIMITED

Executive Summary

Manic Customs Limited is exhibiting clear financial distress symptoms, with persistent negative working capital and negative equity indicating liquidity and solvency challenges. Immediate actions to improve cash flow, control costs, and strengthen capital structure are essential to stabilise the business and avoid insolvency risk. Without intervention, the company faces a precarious financial outlook.

MANIC CUSTOMS LIMITED - Analysis Report

Company Number: 13262825

Analysis Date: 2025-07-20 17:15 UTC

Financial Health Assessment for MANIC CUSTOMS LIMITED (to 31 March 2024)

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1. Financial Health Score: D

Explanation:
The company exhibits clear symptoms of financial distress, characterized by persistent net liabilities and negative working capital over multiple years. While not yet insolvent, the financial metrics suggest ongoing challenges in covering short-term obligations and building equity. The low score reflects significant risk and the need for prompt remedial action.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£3,708	Small investment in long-term assets, consistent over years.
Current Assets	£2,726	Limited liquid and short-term assets; slight improvement from previous year.
Current Liabilities	£15,110	High short-term obligations, increasing since prior years, indicating growing debt pressure.
Net Current Assets (Working Capital)	-£12,384	Negative by a large margin, indicating the company cannot cover current liabilities with current assets—"symptom of liquidity distress."
Total Assets Less Current Liabilities	-£8,676	Negative, meaning total liabilities exceed total assets—signals insolvency risk if trend continues.
Net Assets / Shareholders' Funds	-£8,676	Negative equity position, reflecting accumulated losses and financial strain.
Share Capital	£2.00	Minimal capital base, typical of micro-entity but insufficient to absorb losses.

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3. Diagnosis

The financial "vital signs" of MANIC CUSTOMS LIMITED reveal a company struggling with liquidity and solvency. Negative net current assets ("working capital") are a critical symptom indicating the company does not have enough short-term assets (like cash or inventories) to meet immediate debts. This condition can lead to difficulties in paying suppliers or creditors on time, potentially impairing operational continuity.

The persistent negative net assets (shareholders' funds) over the last four years suggest ongoing operational losses or capital erosion. This "chronic illness" in the balance sheet means the company is technically insolvent under accounting definitions, as liabilities outweigh assets.

Although the company remains active and not in liquidation or administration, these financial symptoms point to a fragile financial condition. The business may be relying on external funding or director loans to sustain operations, which is not sustainable long-term.

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4. Recommendations

Immediate Actions ("Stabilising the Patient"):

• Improve Liquidity: Increase cash reserves or convert assets to cash quickly to reduce short-term liabilities. This may involve negotiating extended payment terms with suppliers or accelerating receivables collection.
• Cost Control: Review operating expenses to reduce cash burn and improve profit margins, aiming to stop further deterioration in equity.
• Capital Injection: Consider raising additional equity capital or securing long-term financing to strengthen the balance sheet and reduce reliance on short-term creditors.

Medium-Term Actions ("Recovery Plan"):

• Business Model Review: Evaluate the profitability of product lines or services to identify loss-making areas for restructuring or disposal.
• Financial Reporting: Enhance transparency and financial planning to monitor cash flow and solvency regularly, enabling proactive management.
• Stakeholder Engagement: Communicate openly with creditors, investors, and directors about financial challenges and recovery plans to secure support.

If these steps are not taken, the prognosis risks worsening financial stress potentially leading to insolvency proceedings.

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