MMS 360 MEDIA LIMITED

Executive Summary

MMS 360 MEDIA LIMITED is currently facing significant financial stress characterized by negative working capital, equity deficits, and minimal cash reserves. However, recent fixed asset investments and increased trade receivables suggest potential growth if liquidity and profitability issues are addressed. Immediate actions to improve cash flow management, control costs, and strengthen the balance sheet are critical to ensure the company’s financial recovery and sustainability.

MMS 360 MEDIA LIMITED - Analysis Report

Company Number: 13549746

Analysis Date: 2025-07-20 16:38 UTC

Financial Health Assessment for MMS 360 MEDIA LIMITED as at 31 August 2024

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1. Financial Health Score: D

Explanation:
The company exhibits significant financial distress symptoms, including persistent net liabilities, negative working capital, and increasing creditor pressures. While it remains active without overdue filings or liquidation proceedings, its financial "vital signs" indicate a fragile condition that requires urgent corrective action.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Current Assets (Working Capital)	£-98,320	Negative working capital signals liquidity stress; current liabilities far exceed current assets, risking inability to meet short-term obligations.
Net Assets (Shareholders' Funds)	£-45,144	Negative net assets indicate the company’s liabilities exceed its total assets, reflecting an equity deficit and financial weakness.
Fixed Assets	£64,471	Tangible assets have increased significantly, potentially indicating investment in equipment or infrastructure, which may improve future operating capacity.
Current Liabilities	£118,714	High current liabilities relative to assets indicate immediate financial obligations that may be difficult to service.
Cash at Bank	£321	Extremely low cash reserves point to poor liquidity and limited ability to cover urgent expenses.
Debtors (Trade Receivables)	£20,073	Trade receivables have increased, which is positive but may also indicate slower cash collection cycles if not managed well.
Profit and Loss Reserve	£-45,236	Large accumulated losses indicate ongoing operational losses or write-downs, contributing to the equity deficit.
Employee Numbers	7 (up from 1)	Increasing staff levels may strain cash flow if revenue growth does not keep pace.

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3. Diagnosis: Financial Condition Overview

The company is currently in a state akin to a patient with a chronic illness that is not yet terminal but requires immediate intervention to avoid a crisis:

• Liquidity Crisis Symptom: The most alarming symptom is the large negative working capital (net current assets), which suggests the company may struggle to pay its short-term debts as they fall due. The very low cash balance exacerbates this concern, indicating a "dry throat" for immediate cash needs.

• Balance Sheet Weakness: The company has a persistent negative net asset position, though slightly improved from prior years. This equity deficit reflects accumulated losses that have not yet been reversed or offset by profits or capital injections.

• Asset Investment: The substantial increase in fixed assets suggests recent capital expenditure, possibly to expand capacity or upgrade technology. While this could be a positive sign of growth investment, it is currently financed by increasing liabilities, which is risky without a clear profit path.

• Revenue and Collection: The increase in debtors shows growing sales or services rendered, but this is not yet translating into strong cash flow, implying possible delays in customer payments or credit management issues.

• Going Concern Risk: The directors acknowledge reliance on their support for going concern, indicating the company may depend on shareholder loans, director advances, or other external funding to keep operating.

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4. Recommendations for Financial Wellness Improvement

• Improve Liquidity Management:

  • Tighten credit control to accelerate debtor collections and reduce days sales outstanding.
  • Negotiate extended payment terms with suppliers or restructure liabilities to alleviate short-term cash pressure.
  • Consider short-term financing options such as invoice factoring or overdrafts to bridge the cash flow gap.

• Cost Control and Profitability Focus:

  • Review operational expenses and overheads carefully, given the increase in staff and fixed assets, to ensure expenditures align with revenue generation.
  • Implement budgeting and forecasting to regularly monitor cash flow and profitability.

• Capital Structure Strengthening:

  • Explore options for equity injection or shareholder loans to restore positive net assets and improve balance sheet resilience.
  • Engage with financial advisors or potential investors to secure additional capital if needed.

• Strategic Review of Asset Investments:

  • Assess the utilization and return on recent fixed asset investments to ensure they contribute to generating positive cash flow and profits.
  • Avoid further capital expenditure until liquidity stabilizes.

• Regular Financial Monitoring:

  • Establish key performance indicators (KPIs) related to liquidity, profitability, and solvency for ongoing health checks.
  • Conduct periodic financial reviews with advisors to detect early symptoms of distress and act promptly.

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