Company Number: 12539225

Analysis Date: 2025-07-29 12:08 UTC

1. Credit Opinion: DECLINE
   Mehina Ltd shows a significant deterioration in financial strength over the last two years. Net assets have fallen sharply from £19,975 in 2023 to just £3,788 in 2024, with working capital shrinking from £20,718 to £6,781. This indicates weakening balance sheet resilience. The micro-entity size and minimal fixed assets limit collateral value. The company operates with only one employee (a director) and limited share capital (£2), suggesting small scale and possible resource constraints. The lack of audit and reliance on micro-entity accounts means financial transparency is limited. These factors raise concerns about the company’s ability to service new credit facilities reliably.

2. Financial Strength:

• Net assets declined by approximately 81% year-on-year, signaling a rapid erosion of equity.
• Current assets have nearly halved, while current liabilities remain high, reducing liquidity buffers.
• Accruals and deferred income doubled, indicating possible delays in revenue recognition or cash receipt, which can strain cash flow.
• Fixed assets are negligible and declining, so the company has limited tangible asset backing.
• Shareholders’ funds closely track net assets, confirming limited external financing or capital injections.

3. Cash Flow Assessment:

• Net current assets remain positive but have declined significantly, indicating decreased short-term liquidity.
• Working capital is tight at £6,781, which may be insufficient to cover unexpected costs or downturns.
• No detailed cash flow statement is available, but the sharp drop in current assets suggests cash generation issues or increased payables.
• The company’s small scale and single employee structure may limit operational flexibility to manage cash flow pressures.

4. Monitoring Points:

• Monitor quarterly or interim financial statements for further declines in net assets or liquidity.
• Track payment performance and creditor aging to detect potential liquidity stress.
• Review director changes and any related party transactions for governance concerns.
• Assess upcoming filings for signs of improved financial controls or capital injections.
• Watch for any signs of overdue filings or changes in company status.