MORGAN SINCLAIR LIMITED

Executive Summary

Morgan Sinclair Limited exhibits significant financial deterioration with a steep decline in equity and working capital over recent years. The company’s small scale and ongoing provisions for liabilities raise concerns about its capacity to service debt. Credit facilities are not recommended without substantial improvements in financial health and operational scale.

MORGAN SINCLAIR LIMITED - Analysis Report

Company Number: 13713365

Analysis Date: 2025-07-19 12:07 UTC

1. Credit Opinion: DECLINE
   Morgan Sinclair Limited shows a marked deterioration in financial strength over the last two years, with net assets declining from £51,844 in 2021 to £5,023 in 2024, indicating significant erosion of equity. The sharp reduction in fixed and current assets combined with high provisions for liabilities and long-term creditors signal financial stress. Given its micro-entity status and minimal employee base, the company appears to lack scale and resilience. The presence of substantial provisions and declining working capital reduces confidence in its ability to meet debt obligations reliably.

2. Financial Strength:
   The balance sheet has weakened considerably. Fixed assets fell from £31,726 to £6,324, and current assets halved from £41,450 to £7,015 over three years. Current liabilities remain relatively stable, but net current assets have shrunk from £30,990 to £3,515, demonstrating tightening liquidity. Provisions for liabilities remain material at £2,316, further weakening net asset value. Shareholders’ funds have reduced by over 90%, which is a red flag for solvency.

3. Cash Flow Assessment:
   The net current assets position is positive but substantially reduced, indicating tighter working capital. However, the minimal employee count (1) and small asset base limit operational scale. The current liabilities of £3,500 are covered by current assets of £7,015, providing a current ratio of about 2.0, which is adequate in isolation but must be weighed against the declining asset base and provisions. No direct cash flow statement is provided, but the balance sheet trends suggest cash flow pressures.

4. Monitoring Points:

• Continued decline in net assets and shareholder funds
• Movement in provisions for liabilities and long-term creditors
• Ability to sustain or grow current assets and working capital
• Any changes in directors or control structure that might affect financial stewardship
• Timely filing of accounts and confirmation statements to ensure compliance and transparency