MECHELECTRICAL LTD

Executive Summary

MECHELECTRICAL LTD exhibits a healthy financial condition characterized by strong liquidity and growing equity in its early years. With prudent management and strategic growth, the company is well-positioned for a stable financial future without signs of distress.

MECHELECTRICAL LTD - Analysis Report

Company Number: 14502730

Analysis Date: 2025-07-29 12:27 UTC

Financial Health Assessment for MECHELECTRICAL LTD

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1. Financial Health Score: B

Explanation:
MECHELECTRICAL LTD exhibits solid financial stability with improving liquidity and net assets over its short operational history. The company’s strong cash position relative to current liabilities and consistent growth in shareholders’ funds are positive signs. However, the business is young, and some financial metrics are still evolving, leaving room for improvement in operational scale and diversification.

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2. Key Vital Signs:

Metric	2024 Value	Interpretation
Cash at Bank	£77,929	Healthy cash reserves, more than sufficient to cover short-term liabilities (current liabilities £42,617). Sign of good liquidity.
Current Liabilities	£42,617	Manageable short-term obligations; company is not over-leveraged in the near term.
Net Current Assets	£35,312	Positive working capital indicating the company can comfortably meet short-term debts.
Net Assets (Shareholders’ Funds)	£35,312	Indicates a growing equity base; net assets have nearly quadrupled from £8,912 in 2023 to £35,312 in 2024.
Employees	2	Small, focused team consistent with a micro/small business profile.
Profit and Loss Account Reserve	£35,310	Accumulated profits retained in the business, reflecting profitability or capital injections.
Overdue Filings	No	Compliance with statutory filing deadlines; reduces risk of penalties and reputational damage.

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3. Diagnosis: Financial "Health" and Underlying Symptoms

• Liquidity ("Pulse"): The company maintains a strong cash position relative to current liabilities, akin to a patient with a healthy pulse rate. This liquidity cushion is a vital sign that MECHELECTRICAL LTD can handle its immediate financial obligations without distress.

• Solvency ("Bone Structure"): Net assets are positive and growing, indicating a stable financial "skeleton." This suggests the company has a solid foundation and is accumulating value for shareholders.

• Growth Trajectory ("Vital Signs Trend"): The increase in net assets and cash from 2023 to 2024 signals healthy growth and effective capital management. The company is in an early growth phase, which is typical for a business incorporated in late 2022.

• Operational Scale ("Muscle Mass"): With only 2 employees, MECHELECTRICAL LTD is lean, which can be efficient but may limit capacity. This "muscle mass" is adequate for current operations but will need to increase to sustain growth.

• Risk Factors ("Symptoms of Distress"): No overdue filings or legal red flags are present, and directors have control and oversight with no disqualifications noted. The company is free from obvious symptoms of financial or regulatory distress.

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4. Recommendations: Prescription for Stronger Financial Wellness

• Maintain Healthy Cash Flow: Continue prudent cash management to preserve liquidity. Avoid overextension on short-term liabilities.

• Expand Operational Capacity: Consider carefully scaling the workforce or outsourcing to increase project capacity without significantly increasing fixed costs.

• Monitor Working Capital: Keep an eye on net current assets to ensure the company maintains positive working capital as business volumes grow.

• Profitability Focus: As the company grows, focus on improving profit margins to strengthen the profit and loss reserve further, providing a buffer for future investments or downturns.

• Strategic Planning: Develop a medium-term financial plan focusing on sustainable growth, investment in assets, and diversification of revenue streams to reduce dependency on limited contracts or clients.

• Compliance Vigilance: Continue timely filing of accounts and confirmation statements to avoid penalties and maintain good corporate standing.

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Executive Summary

MECHELECTRICAL LTD demonstrates strong financial health with robust liquidity and growing net assets, reflecting a stable foundation typical of a healthy young company. Its solid cash reserves and positive working capital suggest no immediate financial distress, though expansion of operational capacity will be necessary to support future growth. Maintaining prudent financial controls and focusing on profitability will help ensure a positive financial prognosis.