MATTIRO LTD

Executive Summary

MATTIRO LTD is currently facing liquidity challenges, evidenced by negative working capital and low cash reserves, despite increased stock holdings. The company’s financial cushion is weakening, signaling a need for urgent cash flow management and cost control measures. With prompt action to improve cash management and strengthen equity, the company can stabilize and improve its financial health.

MATTIRO LTD - Analysis Report

Company Number: 13009759

Analysis Date: 2025-07-20 14:20 UTC

Financial Health Assessment of MATTIRO LTD

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1. Financial Health Score: D

Explanation:
MATTIRO LTD shows signs of financial strain. The company’s net current assets (working capital) have turned negative in the most recent financial year, indicating a liquidity crunch. The net assets and shareholders' funds have been declining steadily, and cash reserves are very low. These symptoms suggest the business is struggling to maintain a healthy cash flow and meet short-term obligations comfortably.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Current Assets	58,289	Increased significantly, mainly due to higher stock levels.
Cash at Bank	1,325	Very low cash reserves, potentially signaling cash flow worries.
Current Liabilities	59,855	Nearly doubled from previous year, creating pressure on liquidity.
Net Current Assets	-1,566	Negative working capital indicates the company may struggle to cover short-term debts.
Net Assets	2,960	Declining over time, reducing the financial cushion of the business.
Shareholders’ Funds	2,960	Mirrors net assets, showing reduced equity value for owners.
Trade Creditors	37,712	Sharply increased, suggesting rising supplier debts or delayed payments.
Tangible Fixed Assets	4,526	Stable, representing a modest asset base.
Employees	0	No employees listed, possibly indicating a sole proprietor or reliance on subcontractors.

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3. Diagnosis: What the Numbers Reveal About Business Health

• Liquidity Stress ("Symptoms of Distress"): The company’s working capital has shifted from a positive £1,160 in 2022 to a negative £1,566 in 2023. Negative net current assets mean current liabilities exceed current assets, which is a classic symptom of liquidity problems. The very low cash balance of £1,325 exacerbates this concern, signaling potential difficulty in meeting immediate obligations such as supplier payments, taxes, or operational costs.

• Increasing Stock Levels: Stock has more than doubled from £24,150 in 2022 to £56,964 in 2023. While this might indicate preparations for higher sales, it could also reveal slow-moving inventory tying up cash. Excess stock without corresponding sales inflows can worsen cash flow and liquidity.

• Rising Creditors: Trade creditors have increased substantially to £37,712, indicating the company is relying more on supplier credit. This can be a survival tactic but may strain supplier relationships and creditworthiness if prolonged.

• Diminishing Equity ("Weakened Financial Immunity"): Net assets and shareholders’ funds have more than halved over two years, from £6,120 in 2020 to £2,960 in 2023. This erosion shows accumulated losses or withdrawals exceeding profits, weakening the company’s financial buffer to absorb shocks.

• No Employees Recorded: The absence of employees could mean the company operates with contractors or is in an early stage. This may limit scalability or indicate low operational capacity, affecting revenue generation potential.

• Industry Context: Operating in hairdressing and specialized construction activities, sectors which can be heavily cash-dependent with variable demand, the company’s liquidity issues could be particularly acute.

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4. Recommendations: Steps to Improve Financial Wellness

• Improve Cash Flow Management:

  • Conduct a detailed cash flow forecast to anticipate future liquidity needs.
  • Accelerate debtor collections if applicable, or negotiate better payment terms with customers.
  • Consider reducing stock levels by improving inventory turnover or liquidating slow-moving items to free up cash.

• Manage and Negotiate Creditors:

  • Engage proactively with suppliers to extend payment terms or arrange payment plans to ease short-term cash pressure.
  • Avoid accumulating further short-term debts that could worsen liquidity.

• Cost Control and Revenue Enhancement:

  • Review operating expenses closely to identify and cut non-essential costs.
  • Explore opportunities to increase turnover through marketing, new services, or diversification aligned with core competencies.

• Strengthen Equity Base:

  • Consider additional capital injection from owners or investors to bolster financial resilience.
  • Retain profits rather than distribute dividends until financial health improves.

• Formal Financial Monitoring:

  • Implement regular financial health checks (e.g., monthly management accounts).
  • Seek professional advice if necessary to assist with restructuring plans or finance options.

• Prepare for Contingencies:

  • Develop a contingency plan in case liquidity issues worsen, including exploring alternative funding sources or operational restructuring.

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Medical Analogy Summary

MATTIRO LTD exhibits "symptoms of financial distress" primarily through negative working capital ("weak pulse") and low cash reserves ("faint heartbeat"). The rising stock and creditor balances resemble "fluid congestion," tying up resources and limiting circulation of cash. The "immune system" (equity) is compromised, reducing the company's ability to withstand shocks. Without intervention, the prognosis may include further deterioration in financial health.

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