MH ELECTRICAL SERVICES (SOUTH EAST) LIMITED

Executive Summary

MH ELECTRICAL SERVICES (SOUTH EAST) LIMITED currently operates with minimal equity and negative working capital, indicating liquidity challenges despite compliance with statutory filings. Immediate focus on improving cash flow and capital structure is essential to strengthen financial health and ensure sustainable operations.

MH ELECTRICAL SERVICES (SOUTH EAST) LIMITED - Analysis Report

Company Number: 12515496

Analysis Date: 2025-07-20 11:51 UTC

Financial Health Assessment: MH ELECTRICAL SERVICES (SOUTH EAST) LIMITED

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1. Financial Health Score: D

Explanation:
The company exhibits very minimal net assets (£1) across multiple years, with liabilities exceeding current assets in the latest year, indicating a fragile financial position. While it remains active and compliant with filings, the financial indicators point towards significant liquidity stress and negligible equity buffer, warranting a cautious outlook.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£6,725	Small investment in long-term assets, a positive sign of some capital deployed in business operations.
Current Assets	£16,159	Includes cash and receivables, but relatively low for covering liabilities.
Current Liabilities	£22,883	Debts due within one year exceed current assets, signaling liquidity pressures.
Net Current Assets	-£6,724	Negative working capital — a symptom of financial strain, indicating difficulty meeting short-term obligations.
Net Assets (Equity)	£1	Barely positive or negligible equity, indicating very thin capital structure.
Share Capital	£1	Minimal shareholder investment, typical for micro-entity but limits financial resilience.
Employee Count	1	Micro business scale, manageable overhead but limited capacity.

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3. Diagnosis

• Symptoms of Financial Distress:
  The negative net current assets in 2024 signal that the company’s short-term liabilities surpass its short-term assets. This is akin to a patient whose vital signs indicate dehydration and weakness — the company may struggle to pay bills on time or fund daily operations without additional support.

• Equity Position:
  The virtually flat equity over several years points to little or no retained earnings or capital injections. This suggests the business is operating at break-even or potentially at a loss, without building financial strength.

• Asset Base:
  The presence of modest fixed assets is a slight positive, showing some investment in tools or equipment relevant to electrical installation. However, this is insufficient to offset liquidity concerns.

• Size and Scale:
  As a micro-entity with only one employee, the company’s scale limits its operational risk but also restricts growth potential and financial flexibility.

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4. Recommendations

• Improve Liquidity Management:
  Urgently address the negative working capital by negotiating longer payment terms with creditors, accelerating receivables, or injecting short-term funding. Think of this as rehydrating a dehydrated patient to restore immediate strength.

• Capital Injection:
  Consider increasing share capital or retaining profits to build equity buffers. This will improve solvency and provide room for operational challenges.

• Cost Control and Revenue Growth:
  Monitor expenses closely and explore growth opportunities to generate positive net income, which can replenish reserves and improve net assets.

• Regular Financial Monitoring:
  Implement monthly cash flow forecasts and financial reviews to identify early warning signs and take corrective action before distress becomes critical.

• Seek Professional Advice:
  If liquidity issues persist, engage with financial advisors or accountants to explore restructuring options or alternative financing.

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