MGA POWER SOLUTIONS LTD

Executive Summary

MGA POWER SOLUTIONS LTD has shown a significant positive turnaround in its financial position, moving from marginal net assets to a solid equity base with strong working capital. The company’s micro-entity status and lean structure limit fixed overhead risks, supporting its capability to meet short-term liabilities. Continued monitoring of liquidity and business scale is recommended to ensure ongoing creditworthiness.

MGA POWER SOLUTIONS LTD - Analysis Report

Company Number: 14270868

Analysis Date: 2025-07-29 20:51 UTC

1. Credit Opinion: APPROVE
   MGA POWER SOLUTIONS LTD demonstrates a strong improvement in its financial position over the latest reporting period. The company has moved from a marginal net asset position (£376 as of 2023) to a robust net asset base (£21,744 as of 2024), indicating improved capitalisation and financial stability. The absence of employees suggests a lean operation, likely subcontracting or consultant-based, which reduces fixed cost risk. No signs of overdue filings or regulatory non-compliance are present. The company’s ability to maintain positive net current assets and equity supports its capacity to meet short-term obligations.

2. Financial Strength:

• Fixed assets remain minimal and stable (~£1,800) reflecting low capital expenditure and likely a service-oriented business model.
• Current assets have increased significantly from £15,504 in 2023 to £38,244 in 2024, enhancing liquidity.
• Current liabilities slightly increased but remain well covered by current assets, resulting in net current assets of nearly £20k versus a prior year deficit.
• Shareholders’ funds and net assets have increased markedly, indicating retention of earnings or capital injection.
  Overall, the balance sheet is healthy for a micro-entity, with positive working capital and equity providing a solid buffer against financial stress.

3. Cash Flow Assessment:

• The significant increase in current assets relative to current liabilities indicates improved liquidity and working capital management.
• The lack of employees reduces ongoing cash outflows related to salaries and benefits.
• The micro-entity exemption from audit and financial reporting under FRS 105 suggests a simple financial structure with limited complexity.
• While full cash flow statements are not provided, the net current asset improvement and increased equity suggest positive operational cash generation or owner funding.
• Monitoring cash conversion cycles and debtor collections will be important to maintain liquidity.

4. Monitoring Points:

• Continued monitoring of current asset quality, particularly receivables, to ensure liquidity remains robust.
• Watch for any increase in liabilities or operational scale that might strain working capital.
• Review subsequent filings to confirm sustained profitability or capital injections maintaining equity.
• Given no employees, assess dependency on key individuals or contractors and associated business continuity risks.
• Keep oversight on director conduct and related party transactions given sole director involvement.