MD GAS SOLUTIONS LTD

Executive Summary

MD Gas Solutions Ltd is a small but active plumbing and HVAC installation business with positive net assets and working capital. However, a significant drop in cash reserves and increased debtor balances raise liquidity concerns. Conditional credit approval is recommended with ongoing monitoring of cash flow and creditor management to mitigate risks.

MD GAS SOLUTIONS LTD - Analysis Report

Company Number: 13247025

Analysis Date: 2025-07-29 15:55 UTC

1. Credit Opinion:
   CONDITIONAL APPROVAL. MD Gas Solutions Ltd demonstrates a positive net asset position and working capital surplus, indicating the company can meet short-term obligations. However, there is a noticeable decline in cash balances and shareholders’ funds over the last year, which warrants caution. The company is small, with limited scale and only one employee, so operational risks are concentrated. Approval should be conditional on monitoring liquidity closely and ensuring timely payment of liabilities.

2. Financial Strength:
   The company has a modest but positive shareholders’ equity of £16,377 as at 31 March 2024, down from £20,748 the previous year. Fixed assets are tangible and valued at £13,815, showing investment in plant and equipment. Current liabilities have increased to £13,047 from £10,456, while current assets have increased slightly to £15,609. Net current assets remain positive at £2,562 but have decreased from £4,089, reflecting a tightening liquidity position. The share capital is nominal (£1), indicating minimal equity injection beyond retained earnings.

3. Cash Flow Assessment:
   Cash at bank decreased significantly from £10,685 in 2023 to £376 in 2024, which is a potential red flag for liquidity. Debtors have increased substantially from £3,610 to £14,983, which may indicate slower collection or larger sales on credit. The company’s working capital remains positive but reduced, indicating tighter short-term financial flexibility. The increase in taxation and social security creditors to £9,259 suggests accrued obligations that must be managed carefully to avoid payment delays.

4. Monitoring Points:

• Monitor cash flow closely, particularly the timing of debtor collections and creditor payments.
• Watch the trend in retained earnings and shareholders’ funds for any further erosion.
• Review the ageing profile of trade debtors to assess collection risk.
• Ensure that tax and social security liabilities are settled promptly to avoid penalties.
• Track any changes in operational scale or employee numbers that might affect cost structure.