MP WELDING AND FABRICATION LIMITED

Executive Summary

MP Welding and Fabrication Limited has shown improving financial health since inception, moving from negative equity to modest positive net assets, but continues to face liquidity challenges as indicated by persistent negative net current assets. Credit could be extended conditionally with close monitoring of working capital and a conservative exposure limit due to the company’s small scale and limited financial transparency. Ongoing review of cash flow and profitability is essential to mitigate risk.

MP WELDING AND FABRICATION LIMITED - Analysis Report

Company Number: 12872830

Analysis Date: 2025-07-20 18:06 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   MP Welding and Fabrication Limited is a micro private limited company in the fabricated metals manufacturing sector. The company shows a positive trajectory in net assets and shareholder equity from a negative position in 2020 to a modest but improving £18,070 in 2023. However, the company has persistent net current liabilities (negative working capital) in recent years, though the shortfall improved significantly in 2023. The small asset base and limited employee count (1 employee) indicate a very small operation with limited scale and diversification. The absence of an audit and limited financial disclosures limit the depth of assessment. The company’s ability to service debt appears constrained by current liabilities exceeding current assets, but the improving balance sheet and positive equity suggest management is making progress. Given these factors, credit provision could be considered with conditions such as limited exposure, close monitoring of liquidity, and possibly personal guarantees or collateral.

2. Financial Strength:

• Fixed assets modestly increased to £18,940 in 2023 from £5,588 in 2020, indicating some investment in long-term assets.
• Current assets rose to £11,659 in 2023, a good increase from £4,280 in 2022, showing improved liquidity potential.
• Current liabilities decreased from £18,655 in 2020 to £12,529 in 2023, reflecting some liability management.
• Net current assets remain negative at -£870 (2023), improved from a significant deficit of -£10,938 in 2022, but still a liquidity risk point.
• Shareholders’ funds increased substantially from a negative £5,014 in 2020 to a positive £18,070 in 2023, indicating retention of profits or capital injection and an improved solvency position.

3. Cash Flow Assessment:

• Negative net current assets indicate working capital constraints and potential pressure on short-term liquidity.
• The company’s improvement in current assets and reduction in current liabilities in 2023 is a positive sign, but the net current liabilities position suggests that cash flow tightness remains a concern.
• The micro-entity status and small employee base suggest limited operational complexity but also limited cash flow generation capacity.
• No detailed cash flow statement is available, so reliance on balance sheet trends is necessary.
• Overall, liquidity is fragile and warrants cautious credit exposure.

4. Monitoring Points:

• Net current assets position should be closely monitored to ensure improvement or at least stability to avoid liquidity crises.
• Profitability trends (not directly reported) should be reviewed annually to confirm ongoing operational viability.
• Timely filing of accounts and confirmation statements should be maintained to avoid compliance risks.
• Any changes in ownership or director conduct should be tracked for governance risks.
• Potential impact of market conditions on fabricated metal products sector should be assessed periodically.