Company Number: 13525176

Analysis Date: 2025-07-20 16:26 UTC

1. Credit Opinion: DECLINE
   M&H Carpet and Flooring Ltd shows a deteriorating financial position with net liabilities as of the latest accounts. The company’s net current liabilities worsened from £3,767 (2023) to £12,338 (2024), and net assets declined sharply from £6,497 to negative £2,074. This indicates liquidity strains and potentially insufficient working capital to meet short-term obligations. Given the negative equity, the company currently lacks the financial strength to reliably service new credit facilities without additional security or guarantees.

2. Financial Strength: Weakening Balance Sheet
   The company maintains modest fixed assets (£10,264) but has seen a decline in current assets (from £45,119 to £40,467) alongside an increase in current liabilities (from £48,886 to £52,805). The deteriorating net current asset position and move into negative net assets reflect financial stress. Shareholders’ funds have turned negative, signaling erosion of capital and raising questions about solvency. This trend suggests the company is experiencing operational or cash flow difficulties.

3. Cash Flow Assessment: Constrained Liquidity
   Current liabilities exceed current assets by £12,338, indicating working capital deficiency. This shortfall implies that the company may struggle to meet its short-term debts and operational expenses without additional financing or cash inflows. The reduction in average employees from 4 to 3 suggests possible attempts to control costs, but liquidity remains a concern. No audit was performed, which limits insight into cash flow quality, but the micro-entity accounts highlight pressing cash management issues.

4. Monitoring Points:

• Track improvements or further deterioration in net current assets and net asset position in the next accounts.
• Monitor timely payment of suppliers and creditors to gauge liquidity management in real time.
• Observe any changes in turnover and profitability that could improve cash flows.
• Review any director loans or related party transactions that might impact financial stability.
• Watch for changes in management or ownership structure that could affect governance and creditworthiness.