MFG CONSULTANTS LTD

Executive Summary

MFG CONSULTANTS LTD is currently facing financial distress, marked by declining turnover, a loss position, and severely depleted working capital and equity. Immediate actions focusing on cash flow management, cost control, and revenue enhancement are necessary to stabilize the business and avoid potential insolvency.

MFG CONSULTANTS LTD - Analysis Report

Company Number: 13773520

Analysis Date: 2025-07-20 15:09 UTC

Financial Health Assessment for MFG CONSULTANTS LTD (up to 31 March 2024)

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1. Financial Health Score: D

Explanation:
The company shows clear symptoms of financial distress in the latest year, with a significant reduction in net assets and a loss reported, indicating a weakening financial condition. While the business remains active and solvent, the sharp contraction in working capital and shareholder funds flags warning signs that require urgent attention.

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2. Key Vital Signs

Metric	2024 (Latest)	2023 (Previous)	Interpretation
Turnover (Revenue)	£23,408	£29,248	Declining sales, reduced business activity
Profit/(Loss)	(£1,807)	£11,927	From profit to loss – symptom of operational stress
Current Assets	£1,024	£25,629	Drastic reduction in liquid assets (cash/debtors)
Current Liabilities	£504	£10,504	Significant drop in short-term debts, possibly due to reduced operations
Net Current Assets	£1,024	£15,125	Working capital collapsed (healthy working capital supports daily operations)
Net Assets (Equity)	£520	£15,125	Shareholder funds severely eroded – weak cushion for losses
Staff Costs	£0	£0	No employees, possibly a sole trader or contractor status
Fixed Assets	£0	£0	No investment in long-term assets or equipment

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3. Diagnosis

MFG CONSULTANTS LTD is exhibiting clear symptoms of financial distress in the latest financial year. The company has shrunk drastically in size as reflected by its turnover falling by about 20%, and more alarmingly, a swing from a profit of nearly £12k to a loss of almost £2k. This loss has eaten into shareholder equity, which has plummeted from over £15k to just £520, a dangerously thin buffer.

The dramatic reduction in current assets from £25,629 to just over £1,000 signals a liquidity crunch. Working capital—a vital sign indicating the company’s ability to cover short-term obligations and fund day-to-day operations—has been almost entirely depleted. This could be due to reduced sales, collection issues, or liquidation of receivables.

The balance sheet shows no fixed assets, indicating the company does not hold long-term tangible resources, which is typical for a consultancy but also means it relies heavily on cash flow to operate.

The absence of staff costs suggests the company is likely a one-person operation without employees, consistent with the director holding 100% control.

Overall, the company is currently solvent but teetering close to the edge of financial instability. The loss and depletion of reserves are symptoms that if unaddressed, could lead to insolvency.

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4. Recommendations

• Cash Flow Management: Immediate focus on improving cash flow to rebuild working capital. This could involve tightening credit terms, accelerating receivables collection, and controlling outgoings rigorously.

• Revenue Growth Strategies: Develop plans to stabilize and grow turnover. Explore new client segments or service offerings to recover from the decline in sales.

• Cost Control: Review all expenses to eliminate unnecessary costs. The significant increase in “Other charges” from £14,523 to £25,215 demands scrutiny to identify controllable overheads.

• Capital Injection: Consider injecting additional equity or securing short-term financing to strengthen liquidity and shareholder funds.

• Financial Monitoring: Implement regular financial health checks and forecasts to detect early symptoms of distress and respond proactively.

• Professional Advice: Engage with a financial advisor or accountant to assist with restructuring if turnaround efforts are needed.

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Medical Analogy Summary

The company’s financial "vital signs" indicate a patient whose "blood pressure" (working capital) has fallen dangerously low, and who has developed "symptoms" such as operating losses and depleted equity reserves. Without intervention, this could progress to "organ failure"—insolvency. Early diagnosis and prompt treatment through cash flow management and cost control are essential to restore financial wellness.

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