MRH CONSTRUCT LIMITED

Executive Summary

MRH CONSTRUCT LIMITED is financially healthy for a newly established micro-entity, demonstrating positive net assets and sufficient working capital to cover short-term liabilities. While the company shows promising stability, its early-stage status calls for careful cash flow management and strategic planning to ensure sustainable growth. Maintaining strong governance and expanding financial transparency will further bolster its financial wellness.

MRH CONSTRUCT LIMITED - Analysis Report

Company Number: 14527785

Analysis Date: 2025-07-29 12:50 UTC

Financial Health Assessment: MRH CONSTRUCT LIMITED (as at 31 December 2023)

---

1. Financial Health Score: B (Good Health with Early Stage Considerations)

Explanation:
MRH CONSTRUCT LIMITED shows sound financial footing for a newly incorporated micro-entity. The company has positive net assets and working capital, indicating a "healthy cash flow" environment relative to its size. However, as a young business with limited financial history and modest asset base, it should be cautious of growth pressures and maintain prudent liquidity management.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	357	Very low fixed assets; typical for a start-up with minimal long-term investments.
Current Assets	40,933	Adequate short-term resources, mainly cash or receivables, which is a positive sign.
Current Liabilities	32,336	Debts due within one year; manageable but requires monitoring to avoid liquidity strain.
Net Current Assets	8,597	Positive working capital ("healthy cash flow"), indicating the company can cover short-term obligations.
Total Assets Less Current Liabilities	8,954	Reflects total net assets; solid equity base for a micro-company.
Net Assets (Shareholders' Funds)	8,954	Positive shareholder equity shows the company is solvent.
Average Number of Employees	1	Very small workforce; operational scale is limited, reducing fixed cost pressures.

---

3. Diagnosis: What the Financial Data Reveals About Business Health

• Liquidity and Solvency: The company demonstrates a positive net current asset position, which is the first "vital sign" of financial health—indicating it can meet its short-term liabilities without distress. Positive net assets confirm solvency, meaning assets exceed liabilities.

• Growth Stage and Asset Base: The minimal fixed assets reflect a business in early stages or with a business model reliant on services rather than capital-intensive equipment or property. This is typical in specialized construction activities where project-based work may not require heavy long-term asset investments.

• Financial Stability: With only one employee and a sole director/shareholder controlling 75-100% equity and voting rights, the company is closely held with streamlined decision-making. This can be advantageous for agility but also means dependency on a single individual’s expertise and financial stability.

• Risk Factors: As a micro entity incorporated recently (December 2022), there is limited financial history to assess trends or cyclicality. The company must be vigilant about managing credit risk, cash flow cycles, and operational scalability as it grows. The absence of an audit is normal for micro companies but limits external assurance.

• Compliance and Filing: The company is up to date with filings and accounts, demonstrating good governance and regulatory compliance—an essential factor in avoiding penalties or reputational damage.

---

4. Recommendations: Specific Actions to Improve Financial Wellness

• Maintain Strong Working Capital: Continue monitoring working capital ratio (current assets to current liabilities). Aim to keep a buffer in liquid assets to cover short-term obligations comfortably, especially in a sector sensitive to payment delays.

• Build Financial History: As the company matures, consider preparing more detailed profit and loss accounts and possibly moving beyond micro-entity accounting standards. This will provide richer financial insights and support for lenders or investors.

• Diversify Asset Base: Evaluate opportunities to invest strategically in fixed assets or intangible assets (e.g., software, certifications) that can enhance operational efficiency or competitive advantage.

• Risk Management: Implement credit control policies to manage debtor risk and avoid cash flow "symptoms of distress." Since the company operates in specialized construction, ensure contractual safeguards and insurance coverage are adequate.

• Succession and Governance Planning: With one director and sole shareholder, consider establishing contingency plans for management continuity and formalizing internal controls as the business grows.

• Regular Financial Reviews: Conduct periodic financial health checks (quarterly or biannually) to detect early signs of financial strain and adjust plans accordingly.

---