MHOFU CAPITAL LTD

Executive Summary

MHOFU CAPITAL LTD exhibits a deteriorating financial position with worsening net liabilities and zero liquidity, raising significant concerns about its ability to service debt. The company’s negative equity and overdue statutory filings further undermine creditworthiness. Credit facilities are not recommended unless substantial improvements in working capital and governance occur.

MHOFU CAPITAL LTD - Analysis Report

Company Number: 13626726

Analysis Date: 2025-07-29 19:59 UTC

1. Credit Opinion: DECLINE
   MHOFU CAPITAL LTD demonstrates a weak financial position with net liabilities worsening significantly from -£5 in 2023 to -£12,575 in 2024. The company has zero current assets in the latest year and increasing current liabilities, indicating poor liquidity and an inability to meet short-term debts. Additionally, only one employee remains compared to four previously, suggesting operational downsizing or distress. The company’s negative shareholder funds and absence of cash reserves raise serious concerns about debt servicing capacity. Also, the overdue confirmation statement filing signals potential compliance and governance weaknesses. Overall, credit risk is high and approval of credit facilities is not advisable without substantial improvement or guarantees.

2. Financial Strength:
   The balance sheet reflects net liabilities of £12,575 as of September 2024, deteriorating from a near break-even position in prior years. Current liabilities exceed current assets by this amount, and total net assets are negative. The company’s micro-entity classification and minimal asset base provide little cushion against financial stress. The absence of fixed assets and zero cash holdings further weaken financial resilience. The decline in net assets over time and negative equity indicate erosion of capital, limiting capacity to absorb losses or support growth.

3. Cash Flow Assessment:
   The company holds no current assets and no cash as of the latest accounts, while current liabilities stand at £12,575. This negative working capital position indicates a liquidity shortfall, rendering the company unable to cover immediate obligations without external funding or asset sales. The prior year’s marginal net current liabilities (-£5) suggest that liquidity issues have escalated sharply. The reduction in employees from four to one could be a cost-cutting measure but may also reflect reduced operational activity and cash inflow. Lack of cash and working capital deficits highlight critical cash flow constraints.

4. Monitoring Points:

• Timely submission of statutory filings, including confirmation statements, to mitigate regulatory risk.
• Quarterly monitoring of liquidity ratios, especially current ratio and quick ratio, to detect early signs of worsening working capital.
• Review management actions to improve cash flow, such as cost control and debtor collections.
• Watch for changes in director or shareholder funding or external financing arrangements.
• Monitor operational scale and employee count for signs of business contraction.