MCVEY PROPERTY CONSULTANCY LIMITED

Executive Summary

MCVEY Property Consultancy Limited maintains positive net assets and working capital but shows signs of financial strain, including declining liquidity and reduced retained earnings due to dividends exceeding profits. To improve financial wellness, the company should strengthen cash flow management, reconsider dividend payouts, and monitor liabilities closely to avoid short-term distress. Prompt action can restore stability and support sustainable growth.

MCVEY PROPERTY CONSULTANCY LIMITED - Analysis Report

Company Number: SC741482

Analysis Date: 2025-07-20 15:38 UTC

Financial Health Assessment: MCVEY PROPERTY CONSULTANCY LIMITED

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1. Financial Health Score: C

Explanation:
The company shows modest financial stability with positive net assets and working capital, but there are signs of mild strain, primarily a significant drop in net assets and net current assets over the last year. The liquidity position has weakened, and retained earnings have sharply decreased due to dividends exceeding profits, indicating potential cash flow tension. Overall, the company is stable but with symptoms of financial fatigue requiring caution and proactive management.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	26,359	20,229	Slight increase, a positive sign indicating cash and receivables availability
Cash at Bank	18,585	20,229	Minor decline in cash reserves, a potential sign of cash flow pressure
Debtors	7,774	0	Increase in receivables, could impact liquidity if not collected promptly
Current Liabilities	25,001	16,067	Significant increase in short-term obligations, raising concerns about upcoming cash demands
Net Current Assets (Working Capital)	1,358	4,162	Sharp decline, indicating tighter short-term liquidity and potential strain
Net Assets (Equity)	1,539	4,404	Decreased substantially, indicating erosion of company value and retained earnings
Retained Earnings	1,439	4,304	Large drop, reflecting dividend payments exceeding profits, which can stress financial resilience

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3. Diagnosis

MCVEY Property Consultancy Limited is currently "alive" with positive net assets and working capital, but the financial "pulse" has weakened noticeably over the last year. The company’s cash flow appears "labored," with cash reserves slightly reduced and current liabilities rising sharply, signaling an increased burden of short-term debts.

The surge in debtors (£7,774) could be a symptom of delayed customer payments, which if prolonged, may exacerbate liquidity issues. The decrease in net current assets from £4,162 to £1,358 is a symptom of tightening working capital, suggesting the company may face challenges meeting short-term obligations promptly.

A critical symptom is the sharp depletion of retained earnings, driven by dividend payments (£68,005) exceeding the year's profit (£65,140). This dividend policy, akin to a patient drawing heavily on savings to cover expenses, risks weakening the company’s financial "immune system," reducing its capacity to withstand future shocks.

The unaudited abridged accounts provide limited insight into profitability and cash flows, but the available data suggest the company should monitor liquidity carefully as it may be entering a phase of financial stress if current trends continue.

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4. Recommendations

• Strengthen Cash Reserves: Focus on improving cash collection from debtors and avoid unnecessary cash outflows to build a healthier cash buffer.

• Review Dividend Policy: Consider suspending or reducing dividends until retained earnings and cash reserves recover, ensuring financial stability and reinvestment capacity.

• Manage Current Liabilities: Engage with creditors to negotiate extended payment terms where possible to ease short-term cash demands.

• Enhance Financial Monitoring: Implement regular cash flow forecasting and working capital reviews to detect early symptoms of distress.

• Profitability Analysis: Although income data is limited, further internal review of profit margins and cost controls is needed to ensure sustainable earnings generation.

• Plan for Growth Prudently: Avoid overextension; maintain conservative financial management to avoid "overburdening" the company during its early growth phase.

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Medical Analogy Summary

MCVEY Property Consultancy Limited is like a patient whose vital signs show a decent baseline but with signs of stress: a weakening pulse in liquidity, a strained cash flow, and depleted reserves from excessive withdrawals (dividends). Without intervention, these symptoms could worsen, risking financial "illness." Timely corrective action, like rest and nutritional support, will help restore financial health and build resilience.

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