MKAC PROPERTIES LIMITED

Executive Summary

MKAC PROPERTIES LIMITED exhibits a solid asset base and improving equity, but persistent negative working capital signals liquidity challenges requiring attention. The company’s increased cash reserves provide a positive sign, yet high debt levels necessitate careful management to avoid financial distress. Strategic focus on liquidity improvement and debt restructuring will enhance the company's financial health and future outlook.

MKAC PROPERTIES LIMITED - Analysis Report

Company Number: 13194111

Analysis Date: 2025-07-29 17:11 UTC

Financial Health Assessment for MKAC PROPERTIES LIMITED

---

1. Financial Health Score: C

Explanation:
MKAC PROPERTIES LIMITED shows signs of moderate financial distress primarily due to persistent negative working capital (net current liabilities) and reliance on significant long-term borrowing. However, the company has tangible fixed assets of substantial value and shareholders' funds have improved over recent years, indicating some resilience. The cash position is healthy relative to past years, but current liabilities remain a pressure point. Overall, the company is stable but faces liquidity and gearing challenges that need careful management.

---

2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	210,935	Increased sharply from prior years, which is a positive sign.
Cash	217,681	Strong cash balance, indicating good immediate liquidity.
Debtors	(6,746)	Negative debtors likely due to advance payments or accounting timing.
Current Liabilities	670,653	High short-term obligations creating liquidity strain.
Net Current Assets (Working Capital)	(459,718)	Negative; indicates the company owes more in the short term than it holds in current assets—a symptom of liquidity stress.
Fixed Assets (Tangible)	1,584,982	Significant fixed assets, mainly land and buildings.
Total Assets less Current Liabilities	1,125,264	Positive and improving, reflecting asset base after short-term debts.
Long-term Liabilities	521,365	Substantial bank loans, representing financial leverage.
Net Assets (Shareholders’ Funds)	603,899	Increased substantially from £370,656 in 2023, showing retained earnings growth and strengthening equity position.
Share Capital	100	Nominal; equity base is small, typical for private limited companies.

---

3. Diagnosis

MKAC PROPERTIES LIMITED operates in the real estate letting sector, with a significant asset base in land and buildings. The company's financial statements reveal a pattern of negative working capital over multiple years, indicating ongoing challenges in covering short-term liabilities with current assets. This condition is akin to a "symptom of distress" in the liquidity system of a business.

However, the company’s cash reserves have increased markedly in 2024, which is a "healthy pulse" indicating better cash management or recent inflows. The negative debtor figure suggests timing or accounting nuances rather than actual customer defaults.

The company carries a substantial amount of debt, both short and long term, which increases financial risk—akin to "high blood pressure" in financial health. This leverage is supported by a strong fixed asset base, which acts as collateral and a cushion against insolvency.

The upward trend in net assets and retained earnings indicates the company is generating profits or increasing its equity base, which is encouraging. The company is not in liquidation or administration, and filings are up to date, which reflects good corporate governance "vital signs."

Overall, the company is operationally stable but financially constrained by liquidity pressures and a high debt load. The negative working capital is the primary concern and may affect the company’s ability to meet obligations without refinancing or operational cash inflows.

---

4. Recommendations

• Improve Liquidity Management:
  Focus on converting current assets into cash more efficiently and negotiating longer payment terms with creditors. Consider reducing negative debtor balances by reviewing accounting practices and enhancing receivables management.

• Debt Restructuring:
  Explore refinancing options to spread debt maturities over a longer horizon or reduce interest costs. This will ease "financial strain" and improve the balance sheet.

• Cash Flow Monitoring:
  Implement rigorous cash flow forecasting and monitoring to ensure ongoing liquidity sufficiency. Maintain the current healthy cash position as a buffer against unexpected expenses.

• Asset Utilisation:
  Review the fixed asset portfolio to identify any underperforming assets that could be sold or better leveraged to improve liquidity.

• Profitability Enhancement:
  While profit data is not provided, increasing profitability through rental income growth or cost control will help build reserves and reduce reliance on debt.

• Contingency Planning:
  Develop contingency plans to manage potential cash flow shocks, including access to credit lines or emergency funding.

By addressing these recommendations, MKAC PROPERTIES LIMITED can strengthen its financial "immune system," improving resilience and long-term viability.

---