Company Number: SC724285

Analysis Date: 2025-07-29 19:24 UTC

1. Risk Rating: HIGH
   The company exhibits signs of significant financial distress within a short operational period, including a drastic decline in net assets and current liabilities exceeding current assets, which raises concerns about solvency and liquidity.

2. Key Concerns:

• Severe Net Asset Erosion: Net assets have plummeted from £63,743 in 2023 to just £90 in 2024, indicating potential losses or write-downs that have almost entirely eroded shareholder equity.
• Negative Cash Position: The company holds zero cash as of the latest accounts, despite having current liabilities of £36,632, which suggests potential liquidity constraints and difficulty in meeting short-term obligations.
• Significant Borrowings: Introduction of bank loans totaling £40,756 (£32,266 current and £8,490 non-current) in the latest year, compared to none previously, increases financial leverage and interest obligations, adding to financial risk.

3. Positive Indicators:

• Active Status and Compliance: The company is active with no overdue filings for accounts or confirmation statements, indicating regulatory compliance and up-to-date statutory obligations.
• Ownership and Control Clarity: Single controlling shareholder/director with clear ownership and governance lines simplifies accountability and decision-making.
• Tangible Fixed Assets Investment: Tangible assets increased slightly, suggesting some capital investment which may support ongoing operations.

4. Due Diligence Notes:

• Profit and Loss Details: The profit and loss account was not included in the filings; obtaining detailed income statement information is essential to understand the drivers behind the net asset erosion and cash depletion.
• Bank Loan Terms and Covenants: Review loan agreements for covenants, repayment schedules, and interest rates to assess refinancing risk and future cash flow impact.
• Trade Debtors Quality: Debtors decreased substantially from £69,682 to £19,544; investigate aging and collectability of receivables to evaluate cash flow prospects.
• Operating Lease Commitments: Lease liabilities increased significantly to £26,651; analyze lease terms and impact on operating cash flows.
• Profitability and Cash Flow Forecasts: Request management forecasts and plans to restore financial health, including measures to improve liquidity and solvency.

Executive Summary:
MJS (SCOTLAND) LTD shows considerable financial deterioration within two years, marked by near-total erosion of net assets and the emergence of substantial bank borrowings. While the company remains compliant with filing obligations and under clear ownership control, the lack of cash and high liabilities pose serious solvency and liquidity risks. Further examination of profitability, cash flow, and debt terms is recommended to fully assess financial stability and operational sustainability.