MK ROOFING AND BUILDING LTD

Executive Summary

MK Roofing And Building Ltd is financially healthy with strong liquidity, growing net assets, and solid working capital, indicating good operational performance and financial management for a young business. To maintain this positive trajectory, the company should prudently manage director loans, maintain cash reserves, and plan for sustainable growth. Regular financial reviews will ensure early detection of any issues as the business scales.

MK ROOFING AND BUILDING LTD - Analysis Report

Company Number: 14385064

Analysis Date: 2025-07-29 12:25 UTC

Financial Health Assessment: MK Roofing And Building Ltd

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1. Financial Health Score: B

Explanation:
MK Roofing And Building Ltd shows strong signs of financial vitality with a healthy growth in net assets and positive working capital. The company has a robust cash position relative to liabilities, indicating good liquidity. However, as it is a relatively young company incorporated in late 2022, with a single director and limited operating history, there remains moderate risk related to business scale and market exposure. The absence of audit and limited disclosure also suggest some caution in interpretation, but overall the financial "vital signs" are encouraging.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Assets	£129,078	Strong equity base, nearly doubled from prior year (£67k). Indicates retained profits and business growth.
Net Current Assets (Working Capital)	£95,333	Very healthy working capital, current assets greatly exceed short-term liabilities, ensuring operational liquidity.
Cash Balance	£131,828	Excellent cash reserves providing a cushion for expenses and investments. Cash exceeds current liabilities by approx. 3.6 times.
Current Liabilities	£36,818	Manageable short-term obligations with no overdue filings or indications of distress.
Fixed Assets	£33,745	Tangible assets are modest but growing, supporting operational capacity.
Debtors	£323	Very low trade receivables, suggesting prompt cash collection or limited credit sales.
Share Capital	£100	Minimal share capital, typical for small private companies. Most equity is retained earnings.
Director's Loan Account	£6,212	Modest director loan, not excessive; monitor for potential repayment needs.
Company Age	~2 years	Early stage, so growth potential is high but also risk from limited track record.

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3. Diagnosis: Financial Health Overview

MK Roofing And Building Ltd exhibits the classic signs of a "healthy patient" in its early growth phase. The company's strong cash flow and ample working capital are like a robust pulse, indicating solid operational liquidity and capability to meet short-term obligations comfortably. The doubling of net assets in one year shows profitable operations or capital injections, akin to weight gain in a recovering patient.

The low level of debt and absence of overdue filings or financial distress symptoms suggest the company is not under acute financial stress. The director’s loan account is modest and not concerning yet, but should be monitored as it represents a liability that may require repayment or formalisation.

The company’s reliance on a single director and small scale operations means there is some vulnerability to market or operational shocks, similar to a patient with a strong baseline health but limited reserves. The lack of an audit is standard for small companies but means financial scrutiny is limited, so continued diligent management is essential.

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4. Recommendations: Prescription for Financial Wellness

• Maintain Strong Cash Reserves: The company’s cash position is a vital organ for survival. Continue to monitor and manage cash flow to avoid liquidity "crises," especially as the business scales.

• Manage Director’s Loan Account Prudently: Formalise repayment terms or consider converting this to equity if appropriate to avoid future financial strain.

• Increase Debtor Turnover: The extremely low debtor balance suggests tight cash collection but also low credit sales. As the business grows, establish clear credit policies to avoid bad debts while supporting customer relationships.

• Plan for Growth Capital Needs: With growing fixed assets and net assets, evaluate if additional investment or borrowing (if prudent) is needed to fund expansion, ensuring the balance sheet remains healthy.

• Regular Financial Review: Given the young age and limited history, implement periodic financial health checks analogous to routine medical check-ups to catch early symptoms of distress.

• Consider Audit or External Review: Although not required, an external review or audit could provide additional assurance to stakeholders and lenders as the company grows.

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