MORGAN M RICHARDS LTD

Executive Summary

Morgan M Richards Ltd demonstrates weak short-term liquidity with negative net current assets and minimal cash reserves against substantial current liabilities, raising concerns about its ability to service debt obligations. While net assets increased due to financial assets, these may not be readily liquid, limiting financial flexibility. Given the high liquidity risk and limited operational scale, credit approval is not recommended without significant mitigation.

MORGAN M RICHARDS LTD - Analysis Report

Company Number: 13199675

Analysis Date: 2025-07-20 16:10 UTC

1. Credit Opinion: DECLINE. Morgan M Richards Ltd exhibits a weak liquidity position with a significant negative net current asset balance (~£211k) due within one year, indicating potential short-term repayment difficulties. Although net assets and shareholder funds have improved year-on-year, the company’s current liabilities vastly exceed its current assets, raising concerns over its ability to meet immediate obligations. The company’s single-employee structure and limited turnover disclosure further limit confidence in operational scale and resilience.

2. Financial Strength: The balance sheet shows net assets of £43,090 as of 31 March 2024, up from £24,821 the previous year, primarily due to the carrying value of other financial assets (£254,016). However, these assets appear to be financial or investment holdings rather than operational fixed assets, which may lack liquidity. The company’s share capital is minimal (£100), and retained earnings have improved modestly. The persistent and growing current liabilities (~£211k) compared to negligible cash balances (£348) undermine the company’s financial robustness.

3. Cash Flow Assessment: Cash on hand remains critically low (£348), insufficient to cover current liabilities of £211,274, reflecting a liquidity shortfall. Negative net current assets indicate working capital deficits, increasing risk of cash flow distress. The company’s inability to generate positive working capital suggests dependence on external financing or asset liquidation to meet short-term debt. The absence of disclosed turnover or profit and loss data restricts visibility on operational cash inflows.

4. Monitoring Points:

• Monitor changes in current liabilities and cash balances quarterly, focusing on working capital improvements.
• Track any changes in the valuation or liquidity of other financial assets (£254k).
• Review future filings for evidence of turnover growth or cash flow generation.
• Evaluate director or management actions to address liquidity risks, including external funding or asset sales.
• Watch for any late filings or adverse changes in company status that could indicate distress.