MP GEAR LIMITED

Executive Summary

MP GEAR LIMITED is financially distressed with negative net assets and poor liquidity, indicating an inability to service debt obligations. The company’s small scale, lack of employees, and worsening financial position present a high credit risk. Approval of credit is not recommended without significant mitigating factors or external support.

MP GEAR LIMITED - Analysis Report

Company Number: 12936437

Analysis Date: 2025-07-20 14:29 UTC

1. Credit Opinion: DECLINE
   MP GEAR LIMITED shows a deteriorating financial position with net liabilities increasing from -£8,194 in 2022 to -£5,173 in 2023 (note: negative net assets implies the company is insolvent on a balance sheet basis). The company's current liabilities significantly exceed current assets (£5,879 vs. £706 in 2023), indicating poor short-term liquidity and inability to cover debts due within one year. There is no evidence of positive cash flows or operational profitability to support debt servicing. The micro-entity status and absence of employees suggest a very small operation with limited resources. Given these factors, the company poses a high credit risk and is unlikely to meet debt obligations without external support.

2. Financial Strength:
   The balance sheet reflects weak financial health. The company has net current liabilities of £5,173 as of 2023 and total net liabilities of the same amount, indicating negative equity. The downward trend from 2022’s -£8,194 net liabilities shows some slight improvement but remains negative and concerning. The company’s share capital is minimal (£1.00), and the absence of fixed assets or other tangible resources limits collateral value. The business appears undercapitalized and financially distressed.

3. Cash Flow Assessment:
   Current assets are very low (£706) compared to current liabilities (£5,879), signifying poor liquidity and negative working capital. No employees are recorded, suggesting limited operating activities and possibly minimal cash inflows. The financial statements do not provide cash flow data, but the negative net assets and current liabilities exceeding assets imply cash flow constraints. The company’s ability to generate sufficient cash to meet short-term obligations is doubtful.

4. Monitoring Points:

• Track any future filed accounts for improvement in net assets and working capital.
• Monitor payment patterns and any overdue filings indicating operational stress.
• Watch for changes in director or shareholder structure that could bring new capital or management.
• Review credit references or transactional behaviour if applying for credit facilities.
• Assess any external funding or guarantees that could mitigate credit risk.