MCANDERS LTD

Executive Summary

McAnders Ltd is currently in a financially vulnerable position characterized by negative net assets and poor liquidity, indicating a high risk of default on financial obligations. The company’s financial trajectory shows worsening solvency with no clear evidence of turnaround or capital support. Credit facilities should be declined until there is demonstrable improvement in the company’s financial health and cash flow generation.

MCANDERS LTD - Analysis Report

Company Number: SC706239

Analysis Date: 2025-07-19 12:54 UTC

1. Credit Opinion: DECLINE
   McAnders Ltd displays significant financial weakness with persistent and worsening negative net current assets and net liabilities over the past two years. The current liabilities are substantially higher than current assets (£58,812 vs £6,382 in 2023), indicating acute liquidity pressure. The company's negative equity position (-£52,430) signals insolvency risk. Given the micro-entity size and limited operational scale (one employee), the ability to generate sufficient cash flow to service debt or meet commercial commitments appears very limited. The resignation of one director and concentration of control also raise concerns about management bandwidth and continuity.

2. Financial Strength:
   The balance sheet reveals chronic undercapitalization and poor financial structure. The company’s net liabilities have grown from -£19,285 to -£52,430 in one year, reflecting accumulated losses or insufficient capital injections. There are no fixed assets reported, which suggests absence of tangible collateral. The negative shareholders’ funds confirm erosion of equity and weak solvency. This financial profile is typical of a company at an early development stage but with a deteriorating financial position.

3. Cash Flow Assessment:
   Liquidity is severely constrained as demonstrated by a large gap between current assets and current liabilities, producing negative working capital of £52,430. This shortfall implies that the company lacks sufficient liquid resources to cover short-term obligations. The absence of significant current assets like cash or receivables indicates limited operational cash inflows or poor collection. Without external financing or capital support, ongoing operations and creditor payments are at risk.

4. Monitoring Points:

• Improvements in net current assets and reduction of creditor balances.
• Cash flow statements and operational profitability to assess if losses are narrowing.
• Any capital injections or shareholder loans to strengthen equity base.
• Changes in management or director appointments that could impact governance.
• Filing of annual accounts and confirmation statements on time, to maintain compliance.