MOSS&GUND LTD

Executive Summary

MOSS&GUND LTD shows signs of severe financial stress with near-zero equity and extremely tight liquidity. Immediate action on cash flow, cost management, and dividend suspension is essential to avoid insolvency risks and restore financial health.

MOSS&GUND LTD - Analysis Report

Company Number: 13510493

Analysis Date: 2025-07-29 14:24 UTC

Financial Health Assessment Report for MOSS&GUND LTD (as at 30 June 2024)

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1. Financial Health Score: D

Explanation:
The company exhibits concerning signs of financial distress, primarily evidenced by near-zero net assets and minimal positive working capital. The drastic reduction in net assets from previous years and the presence of current liabilities almost equal to current assets signal liquidity strain. This score reflects a fragile financial state requiring urgent management attention.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Net Assets	5	Critically low, indicating minimal equity backing the business.
Net Current Assets	5	Slightly positive but effectively negligible working capital.
Current Liabilities	4,095	Substantial short-term obligations relative to assets.
Current Assets	4,100	Almost entirely consumed by liabilities; very tight liquidity.
Cash at Bank	2,310	Only about half of current liabilities covered by cash.
Debtors (Loans to Directors)	1,790	Significant receivables tied up as director loans, potential risk.
Fixed Assets (Net)	0	Fully depreciated or disposed, no long-term tangible asset base.
Share Capital	2	Nominal share capital, typical for small private entities.
Dividend Paid	13,618	Large dividend payout despite fragile financials, a symptom of stress.

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3. Diagnosis

Symptom Analysis:

• Liquidity Strain: The company's current liabilities (£4,095) nearly match its current assets (£4,100), resulting in a razor-thin net current assets position (£5). This suggests the company barely meets its short-term obligations, akin to a patient with dangerously low blood pressure—any unexpected expense or delay in receivables could tip it into crisis.

• Erosion of Equity: Net assets have plummeted from £1,427 in 2023 to just £5 in 2024, indicating accumulated losses or payouts exceeding earnings. The equity base is almost non-existent, similar to a patient whose vital organ function is critically impaired.

• Absence of Fixed Assets: The disappearance of tangible fixed assets (computer equipment) implies the company has fully depreciated or disposed of these assets, reducing collateral or operational capacity.

• Director Loans: The company has an outstanding debtor balance (£1,790) entirely composed of director loans. This reflects potential cash flow management issues or reliance on directors for funding, which may impair operational liquidity.

• Dividend Payment: A dividend of £13,618 was paid during the year, a significant outflow relative to cash and equity. This is a "symptom of distress," as paying dividends under such tight financial conditions can worsen liquidity and solvency.

• Turnover and Profitability: Although turnover data is not explicitly provided, the lack of growth in net assets and high liabilities suggest the company is either not generating sufficient profit or is distributing more cash than it earns.

• Increased Staffing: The company now has 2 employees (including directors) whereas previously it had none, possibly increasing fixed costs without corresponding revenue growth.

Overall Health: The company resembles a patient in critical condition with minimal reserves and high liabilities. Without intervention, the risk of insolvency or operational disruption is elevated.

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4. Recommendations

Immediate Actions:

• Cash Flow Management: Tighten control over cash inflows and outflows. Delay or reduce dividend payments until financial health improves to preserve liquidity.

• Review Director Loans: Consider formalizing repayment plans or converting loans into equity to strengthen the balance sheet and reduce debtor risk.

• Cost Control: Evaluate fixed and variable costs, especially staffing and overheads, to align expenses with realistic revenue projections.

• Asset Utilization: Explore opportunities to acquire or lease essential fixed assets to support operations efficiently, as the current asset base is depleted.

• Financial Planning: Prepare detailed cash flow forecasts and budgets to anticipate funding gaps and plan accordingly.

• Funding Options: Investigate external funding sources such as bank loans, equity injections, or grants to bolster working capital and support growth.

• Governance Improvement: Enhance financial oversight and reporting to quickly identify and address emerging financial issues.

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Executive Summary

MOSS&GUND LTD is experiencing critical financial strain marked by minimal net assets and almost no working capital, jeopardizing its short-term liquidity and overall viability. The company’s financial "vital signs" indicate an urgent need for tighter cash flow management, cost control, and reconsideration of dividend policies to stabilize its position. Without corrective measures, the risk of financial distress will likely worsen, threatening the company’s ongoing operations.