Company Number: 14762371

Analysis Date: 2025-07-19 12:21 UTC

1. Credit Opinion: DECLINE

MDKD LIMITED presents a significant credit risk at this stage. The company, incorporated less than one year ago, shows a net liability position of £12,371 and a severely negative working capital of £97,663, indicating an inability to meet short-term obligations from current assets. The large current liabilities relative to current assets and net assets raise concerns about liquidity and solvency. Additionally, the company is operating in a high cash burn sector (licensed restaurants) which often requires strong cash reserves and operational efficiency. Without evidence of positive cash flow or profitability, and given the negative equity, the company is not currently creditworthy for unsecured lending or significant credit facilities.

2. Financial Strength:

• Net assets: -£12,371 (negative equity)
• Fixed assets: £85,292 (mainly plant & machinery and goodwill)
• Current assets: £66,771 (cash £42,555, debtors £17,500, stock £6,716)
• Current liabilities: £164,434 (trade creditors £2,714, other creditors £149,851, tax and social security £11,869)
• Working capital: -£97,663 (current assets minus current liabilities)
• Share capital is nominal at £2, indicating minimal shareholder equity injection.

The negative net assets position indicates the company is insolvent on a balance sheet basis. The large proportion of "other creditors" suggests considerable short-term liabilities, possibly from suppliers or accrued expenses, which the company may struggle to pay.

3. Cash Flow Assessment:

• Cash on hand is £42,555, which provides some liquidity buffer, but is insufficient to cover the £164,434 current liabilities.
• Debtors of £17,500 may provide some short-term inflows but are unlikely to be fully collectible or sufficient to cover liabilities.
• The negative working capital indicates potential cash flow strain.
• No profit and loss details were provided but the P&L reserve is negative, indicating cumulative losses.
• The company employed 5 people on average in the first year, which may represent fixed overhead costs impacting cash flow.

4. Monitoring Points:

• Monitor monthly cash flow closely to ensure liquidity is maintained.
• Track reduction in current liabilities and improvement in working capital.
• Watch for timely payment of trade creditors and tax liabilities to avoid enforcement action.
• Review profitability trends once trading data is available for the next period.
• Watch for any shareholder capital injections or loan facilities to improve financial position.
• Observe management's ability to control costs and grow revenue to move towards positive equity.

Executive Summary: