MIKE LEVERATT CONSULTANTS (MLC) LTD

Executive Summary

MIKE LEVERATT CONSULTANTS (MLC) LTD shows signs of financial strain with negative net assets and reduced working capital, signaling caution despite maintaining positive short-term liquidity. Prompt action to improve cash flow, control costs, and bolster equity is essential to reverse these symptoms and secure a healthier financial future.

MIKE LEVERATT CONSULTANTS (MLC) LTD - Analysis Report

Company Number: 13198460

Analysis Date: 2025-07-29 17:15 UTC

Financial Health Assessment of MIKE LEVERATT CONSULTANTS (MLC) LTD

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1. Financial Health Score: D

Explanation:
The company shows symptoms of financial distress with negative net assets and shareholders’ funds in the latest year, declining from a previously positive position. While the business remains active with current assets exceeding current liabilities, the erosion of equity signals underlying financial strain. The score reflects caution and the need for strategic financial management.

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2. Key Vital Signs

Metric	2023 (£)	2022 (£)	Interpretation
Current Assets	707	656	Slight increase; indicates modest liquidity improvement.
Current Liabilities	619	459	Increase; rising short-term obligations could pressure liquidity.
Net Current Assets (Working Capital)	88	197	Decreased; weakening short-term financial buffer.
Accruals & Deferred Income	130	120	Increase; potential unearned revenue or accrued expenses.
Net Assets / Shareholders’ Funds	-42	77	Shift from positive to negative; indicates capital erosion and potential solvency concerns.
Share Capital	100	100	Constant; small equity base typical of micro companies.

Interpretation of Vital Signs:

• The company’s working capital remains positive, indicating it can cover short-term liabilities with current assets, but the declining buffer (from £197 to £88) is a warning sign of tightening liquidity.
• The shift to negative net assets means total liabilities now exceed total assets, a critical symptom akin to a "weakened heart" in financial health terms. This can limit borrowing capacity and investor confidence.
• The slight increase in accruals and deferred income suggests growing obligations not yet settled or recognized revenue, potentially masking cash flow timing issues.

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3. Diagnosis

MIKE LEVERATT CONSULTANTS (MLC) LTD is showing symptoms of financial distress characterized by declining net assets and shrinking working capital. While the company maintains a positive short-term liquidity position, the erosion of shareholder equity indicates operational or financial pressures that have resulted in accumulated losses or increased liabilities.

The company operates in a niche within the civil engineering sector, classified as a micro-entity, which typically means limited resources and scale. The negative net asset position signals a risk of insolvency if conditions do not improve, akin to a patient whose vital signs are weakening but still stable enough for intervention.

The directors’ decision to not audit is consistent with micro-entity status but reduces external scrutiny, placing more emphasis on internal financial discipline.

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4. Recommendations

To restore and maintain financial wellness, the company should consider the following actions:

1. Improve Cash Flow Management:

   • Closely monitor receivables and payables to avoid cash crunches.
   • Accelerate collection of debts and negotiate extended payment terms with suppliers.

2. Address Capital Deficiency:

   • Consider capital injection by shareholders or external investors to strengthen the equity base.
   • Evaluate possibilities for retained earnings improvement via cost control and revenue growth.

3. Cost Control and Efficiency:

   • Review operating expenses to identify non-essential costs for reduction.
   • Explore ways to increase project margins or diversify client base to stabilize income.

4. Financial Forecasting and Monitoring:

   • Implement regular budgeting and forecasting to anticipate liquidity needs and prevent surprises.
   • Use financial dashboards to track key metrics and early warning signs.

5. Seek Professional Advice:

   • Engage a financial advisor or accountant to review financial strategy and turnaround plans.
   • Consider preparing full financial statements including a P&L to identify profit and loss drivers.

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Executive Summary

MIKE LEVERATT CONSULTANTS (MLC) LTD currently faces financial challenges, marked by a decline from positive to negative net assets and shrinking working capital. Although liquidity remains positive, the company exhibits early signs of distress that require prompt management action to restore financial stability and prevent further deterioration. Strengthening cash flow, controlling costs, and enhancing capital structure are critical for improving its financial health.