MB HOLDEN LTD

Executive Summary

MB Holden Ltd demonstrates improving equity and asset growth but continues to operate with negative working capital, indicating potential liquidity constraints. Credit approval is possible on a conditional basis, with close monitoring of cash flow and short-term liabilities recommended to mitigate risk. The company’s small scale and single director-shareholder structure require cautious exposure management.

MB HOLDEN LTD - Analysis Report

Company Number: 13504320

Analysis Date: 2025-07-19 12:24 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   MB Holden Ltd shows an improving financial position with increased fixed assets and shareholders’ funds over the latest financial year, indicating some positive growth. However, the company consistently reports net current liabilities (negative working capital), which poses liquidity risks and may challenge short-term debt servicing. Given its micro size, limited employee base, and reliance on a single director-shareholder, careful monitoring is warranted before extending credit. Approval could be considered with conditions such as limiting exposure, shorter terms, or requiring personal guarantees.

2. Financial Strength:
   The balance sheet reveals modest fixed assets (£89k) that nearly doubled from the prior year (£49k), suggesting some reinvestment or asset acquisition. Shareholders’ funds increased substantially from £17k to £66k, reflecting retained earnings or capital injections. Despite this, net current liabilities remain negative at £23k, though improved from £32k prior year. Total assets less current liabilities rose to £66k, indicating a stronger net asset base. Overall, financial strength is moderate but constrained by working capital deficits and small scale.

3. Cash Flow Assessment:
   Negative net current assets highlight potential cash flow pressure, as current liabilities (£177k) exceed current assets (£154k). This may limit the company’s ability to meet short-term obligations without external funding or additional capital. The company’s small employee count (2) and micro classification suggests a lean operation, possibly reducing overheads but also limiting operational flexibility. Continuous monitoring of cash conversion cycles and creditor terms is advised to avoid liquidity shortfalls.

4. Monitoring Points:

• Liquidity ratios (current ratio, quick ratio) to detect worsening short-term funding gaps.
• Trends in net current liabilities to ensure continued improvement or stabilization.
• Cash flow statements when available to verify operating cash generation.
• Any changes in director or ownership control impacting governance or financial discipline.
• Trading performance relative to fixed asset growth to assess asset utilisation efficiency.