MCHIMICHA LTD

Executive Summary

MCHIMICHA LTD is currently experiencing financial distress, characterized by negative net assets and no liquid current assets, indicating liquidity challenges and operational inactivity. Immediate action to improve working capital and reassess the business model is essential to restore financial health and ensure sustainability.

MCHIMICHA LTD - Analysis Report

Company Number: 13246327

Analysis Date: 2025-07-29 18:18 UTC

Financial Health Assessment Report for MCHIMICHA LTD
Assessment Date: Post 31 March 2024 Financial Year End

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1. Financial Health Score: D

Explanation:
MCHIMICHA LTD currently shows signs of financial distress, with net liabilities reported in the latest year and a lack of current assets. The company’s financial "vital signs" indicate a weakened state, akin to a patient showing symptoms of resource depletion and impaired operational capacity. While not in immediate insolvency, the company is struggling to maintain a healthy balance sheet, warranting a below-average financial health grade.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	0	679	Zero current assets imply no liquid resources or receivables to cover short-term obligations.
Current Liabilities	557	886	Current liabilities remain substantial relative to assets, indicating short-term obligations.
Net Current Assets (Working Capital)	-557	-207	Negative working capital indicates symptoms of liquidity stress, unable to cover immediate debts.
Total Assets less Current Liabilities	-556	-206	Negative figure shows the company owes more than it owns in assets, a critical sign of distress.
Net Assets (Shareholders’ Funds)	-556	-556	Negative equity reflects accumulated losses or undercapitalization, indicating financial weakness.
Share Capital	1	1	Minimal share capital indicates limited initial funding.
Employees	0	0	No employees suggests either very small scale or non-operational status.

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3. Diagnosis: Financial Condition Overview

MCHIMICHA LTD exhibits symptoms of financial distress characterized primarily by zero current assets and persistent negative net current assets. The company’s balance sheet shows negative net assets (£556), indicating that liabilities exceed total assets, akin to a patient with a deficient vital organ function.

The absence of current assets signals a lack of cash or receivables, which is crucial for day-to-day operations—this is the equivalent of "healthy cash flow" being absent. The company’s ability to meet short-term liabilities is compromised, raising concerns about liquidity risk.

The unchanged negative net assets from the previous year suggest no improvement in financial health, and the lack of employees corresponds with limited operational capacity or possibly a dormant or non-trading state despite active status.

The company’s micro-entity classification means simplified reporting, but the financial position is still concerning. The director and sole shareholder (Mr. Hamza Chemach) holds full control, which is positive in terms of decision-making agility but also concentrates risks.

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4. Recommendations: Path to Financial Wellness

To improve financial health and move from distress toward stability, MCHIMICHA LTD should consider the following actions:

• Inject Working Capital: The company must raise funds (either through shareholder loans, fresh equity, or external financing) to replenish current assets and improve liquidity. Think of this as "administering fluids" to a dehydrated patient to restore vital functions.

• Reduce Current Liabilities: Negotiate extended payment terms with creditors or settle short-term debts to reduce immediate financial pressure.

• Operational Review: Evaluate the business model and operational activity since zero employees and current assets suggest minimal trading activity. Consider reactivating revenue streams or pivoting to profitable activities aligned with the company’s SIC codes (IT consultancy and retail).

• Financial Monitoring: Implement robust cash flow forecasting and financial controls to detect early warning signs and avoid worsening liquidity.

• Seek Professional Advice: Engage financial advisors or turnaround specialists to develop a restructuring plan, especially if the company’s trading conditions are challenging.

• Explore Grants or Support: Given the company’s size and sector, investigate government schemes or grants that could improve capital availability.

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