MRT ENGINEERING LTD

Executive Summary

MRT Engineering Ltd is an active small engineering company with a marginally positive net asset and working capital position. Liquidity is tight with limited cash reserves and significant statutory liabilities, requiring cautious credit exposure. Conditional approval is recommended with close monitoring of cash flow, receivables, and statutory payments.

MRT ENGINEERING LTD - Analysis Report

Company Number: 13357395

Analysis Date: 2025-07-29 15:23 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   MRT Engineering Ltd is a small, relatively new company (incorporated 2021) operating in engineering activities. The company shows a positive but very modest net asset base (£335 as at 30/11/2024) and net current assets (£335), indicating a minimal buffer over current liabilities. There is no indication of negative equity or insolvency. However, the company’s working capital and net assets have decreased slightly from the previous year, and cash balances, while improved in 2024 (£3,537), remain low. The director ownership structure is concentrated with Mr. Murat Guder controlling 75-100% of shares and voting rights, which can be positive for decision-making but also concentrates risk. The company has no overdue filings and is compliant with Companies House requirements. Given the modest financial strength and limited scale, credit should be extended cautiously, preferably with conditions such as monitoring of cash flow and receivables, and limits on exposure.

2. Financial Strength:
   The balance sheet shows a marginal net asset value of £335, reflecting a very small equity base. Current assets (£8,811) slightly exceed current liabilities (£8,476), yielding a net current assets position of £335. The company holds minimal fixed assets or long-term investments, typical for a micro or small engineering service firm. Shareholders’ funds have increased slightly from £294 in 2023 but remain minimal. Debtors are largely represented by a director’s loan account (£5,274), which could indicate inter-company balances or director funding, potentially less liquid than trade receivables. The company’s low asset base and tight working capital position limit financial resilience to adverse events.

3. Cash Flow Assessment:
   Cash at bank improved from £1,269 in 2023 to £3,537 in 2024, suggesting some strengthening of liquidity. However, the cash balance remains low relative to current liabilities of £8,476. The company’s net current assets are positive but very slim, and the high taxation and social security creditor balance (£8,371) suggests a significant amount of statutory liabilities due within one year. The average number of employees decreased from 2 to 1, possibly reflecting cost control efforts. Cash flow appears constrained, so careful monitoring of receivables collection, creditor payment terms, and statutory liabilities is critical to avoid liquidity stress.

4. Monitoring Points:

• Regular review of debtor aging and director’s loan account to ensure timely cash conversion.
• Monitor cash balances against tax and social security liabilities to avoid statutory default.
• Watch for any increases in short-term creditors or any signs of delayed payments to suppliers or tax authorities.
• Track turnover and profitability trends once profit and loss figures become available, to confirm sustainable cash generation.
• Observe any changes in director ownership or governance structure that could impact financial decisions.