MORRISH & WILSON LTD

Executive Summary

Morrish & Wilson Ltd maintains a strong asset base with increasing equity, indicating steady financial progress. However, its substantial long-term debt and relatively low cash reserves suggest potential liquidity pressures that require active management. By improving cash flow and managing debt prudently, the company can sustain its growth and strengthen financial resilience.

MORRISH & WILSON LTD - Analysis Report

Company Number: 13132764

Analysis Date: 2025-07-20 14:01 UTC

Financial Health Assessment of Morrish & Wilson Ltd

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1. Financial Health Score: B-

Explanation:
Morrish & Wilson Ltd demonstrates a stable asset base and positive net assets, but there are notable concerns regarding liquidity and leverage. The company holds significant fixed assets (land/property) which are stable and not depreciated, indicating a solid long-term investment. However, current liabilities and long-term creditors, particularly director loans and bank loans, are substantial relative to current assets and cash reserves. This suggests some strain on short-term cash flow and a moderate risk profile. Overall, the company is financially stable but shows symptoms that require monitoring and active management to maintain health.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Fixed Assets	£646,650	Strong asset base in property; non-depreciated asset ensures value retention.
Current Assets (Cash)	£25,676	Low cash reserves relative to liabilities; potential liquidity pressure.
Current Liabilities	£5,087	Minimal short-term obligations; manageable at present.
Long-Term Liabilities	£628,869	High long-term debt, including bank and director loans; leverage risk.
Net Current Assets	£20,589	Positive working capital, indicating short-term operational liquidity.
Net Assets	£38,370	Positive equity; company has made progress since prior years.
Shareholders’ Funds	£38,270	Equity growth from £17k to £38k indicates retained profits or capital injection.
Debt to Asset Ratio	~0.94 (Long-term debt to fixed assets)	High leverage; company relies heavily on borrowed funds.

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3. Symptoms Analysis

• Healthy Asset Base: The company’s tangible fixed asset (land/property) is significant and stable at £646,650, providing a solid financial foundation akin to a strong skeletal structure in a body.
• Cash Flow Constraints: Cash on hand (£25,676) is relatively low compared to the size of long-term liabilities (£628,869). This discrepancy is a symptom of limited "healthy blood flow"—cash movement—that may affect the company’s ability to meet unexpected short-term needs.
• Leverage and Debt Profile: The presence of bank loans (£251k) and director loans (£378k) indicates reliance on external and internal financing. While the loans enable growth, they also introduce "stress" on the company’s financial system. The fact that director loans are substantial may point to a closely held company managing its finances through internal support.
• Working Capital: Positive net current assets (£20,589) suggest the company can cover its immediate liabilities, a good sign of short-term resilience.
• Profit Retention: The increase in shareholders’ funds from £17k to £38k within one year points to retained earnings or capital injections, signaling profitability or reinvestment.

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4. Diagnosis

Morrish & Wilson Ltd is in a stable but cautious health condition. The company’s strong fixed asset base acts as a sturdy framework, but the high level of long-term debt and relatively low cash reserves reveal underlying stress symptoms that could affect liquidity if cash inflows falter. The positive working capital and growing equity indicate the company is managing its operational finances adequately but should be vigilant. The financial system of the company resembles a patient with a strong skeleton but a somewhat weak circulatory system—stable in structure but requiring careful monitoring of cash flow to avoid distress.

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5. Recommendations

• Improve Cash Reserves: Enhance liquidity by accelerating receivables collection, controlling expenses, or injecting additional working capital. Just as a doctor would recommend hydration for better blood flow, improving cash reserves will provide operational flexibility.
• Manage Debt Levels: Consider refinancing options to reduce interest burdens or stagger loan repayments to ease financial pressure. Engaging with lenders for favorable terms could reduce "cardiac stress" on the financial system.
• Monitor Director Loans: Formalize and review director loan arrangements to ensure they are sustainable and transparent, preventing potential conflicts or future financial strain.
• Leverage Fixed Assets: Explore opportunities to unlock value in fixed assets, such as property refinancing or sale and leaseback arrangements, to boost liquidity without sacrificing core assets.
• Financial Planning: Implement robust cash flow forecasting to anticipate and mitigate liquidity crunches, keeping the company’s financial health in check.
• Profitability Focus: Maintain or enhance profitability to continue building equity and reduce reliance on debt.

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